Here's How Lilly's Non-Obesity Drugs are Contributing to Sales Growth
Some key growth products include the oncology drug Verzenio and immunology drug Taltz, which accounted for 9% and 6% of total first-quarter sales, respectively. Sales of these blockbuster medications are being driven by increased demand — Taltz sales rose 26% year over year during the quarter, while Verzenio sales jumped 10%. Over the past couple of years, LLY's new drugs — including Omvoh and Ebglyss in immunology, Jaypirca in oncology and Kisunla in neuroscience — have all been contributing to its top-line growth. Lilly expects the potential launch of new medicines like imlunestrant for metastatic breast cancer to contribute to growth in 2025.
Though Lilly's non-obesity portfolio is contributing meaningfully, investor focus largely remains on the GLP-1 products. All eyes would be on the magnitude of their sequential growth and market share gains in the upcoming second-quarter results. Our model estimates sales at around $4.46 billion for Mounjaro and $3.09 billion for Zepbound in the to-be-reported quarter.
Big Pharma Diversifies Beyond Flagship Drugs
While Lilly's non-obesity portfolio is gaining traction, peers like AbbVie ABBV and Merck MRK are also broadening their therapeutic reach beyond core revenue drivers.
AbbVie, which already markets multiple flagship immunology drugs — Humira, Rinvoq and Skyrizi — is expanding its presence in oncology and neuroscience. In recent years, ABBV has added Epkinly, Elahere and most recently, Emrelis, bringing its total oncology therapies to five. Growth in its neuroscience segment has also been supported by increasing uptake of its migraine drugs, Ubrelvy and Qulipta.
Merck, whose flagship oncology drug Keytruda accounts for nearly half of its total revenues, is expanding its late-stage pipeline to reduce dependence on the product. We believe new products like Capvaxive (pneumococcal vaccine) and Winrevair (PAH drug) have the potential to generate significant revenues over the long term. Merck recently secured the FDA's approval for long-acting RSV antibody Enflonsia for newborns, which is expected to launch later this month.
LLY's Price Performance, Valuation and Estimates
Shares of Lilly have outperformed the industry year to date, as seen in the chart below.
From a valuation standpoint, Eli Lilly is expensive. Based on the price/earnings (P/E) ratio, the company's shares currently trade at 29.45 times forward earnings, higher than its industry's average of 15.04. However, the stock is trading below its five-year mean of 34.54.
Estimates for Lilly's 2025 EPS have declined from $22.23 to $21.95 in the past 60 days, and EPS estimates for 2026 have increased from $30.89 to $30.91 over the same timeframe.
Eli Lilly currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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