Big, fat demand for weight-loss drugs fuels Eli Lilly stock surge as market cap hits $1.2 trillion

Eli Lilly stock hit a record high Thursday thanks to a stronger-than-expected earnings report fueled by sales of weight loss drugs Mounjuaro and Zepbound.The company’s stock jumped 6% to hit a whopping $1.3 trillion valuation after it raised its full-year earnings forecast.Sales of both Mounjaro and Zepbound beat expections by over 5%, solidifying Eli Lilly’s lead in the booming obesity-drug market.Over half a million patients are using the injections through Medicare, Lilly said.At a reduced, $50-a-month-price tag for them, investors were worried about potential profit losses, but Lilly’s annual forecasted revenue still went up 1% to $92 billion. The report underscored just how big of a lead the company has in the multibillion-dollar GLP-1 market.

Lilly competitor Novo Nordisk, which makes WeGovy, is valued at about $171 billion, according to Reuters.Lilly’s recent acquisitions of psychedelic drugmaker AtaiBeckley and clinical biotech vaccine company Cuervo put dents in the profit outlook, according to Reuters.The company reduced forecasted profit shares by 50 cents.But the annual forecast bump was enough to convince investors the company is on the right track, said Greg Halter, director of research at Carnegie Investment Counsel.“They’re ​spending money so that they can make money down the road,” said Halter, who owns over 16,000 Eli Lilly shares.

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Investors are closely tracking the company’s new oral weight-loss drug Foundayo to see if it can compete with Novo’s oral Wegovy, which is leading in prescriptions.Oral Wegovy saw users shed about 14% of body weight over 64 weeks, while Foundayo ​patients saw a roughly 11% drop in 72 weeks, according to separate studies. Lilly’s pill saw 15% fewer sales tha...