Eli Lilly’s Next Big Blockbuster Is Here

In recent years, the pharmaceutical industry has been flooded with glucagon-like peptide-1 (GLP-1) agonists. Even if you are not familiar with this terminology, I bet you are familiar with diabetes and obesity drugs such as Ozempic, Wegovy, and Mounjaro, which are all GLP-1 drugs.

Currently based in Denmark Novo Nordisk (NYSE: NVO) dominates the GLP-1 market, thanks to its wide range of treatments, including Ozempic, Wegovy, Rybelsus and Saxenda. However, Novo Nordisk’s main rival in the weight loss field should not be overlooked.

Elie Lilly (NYSE: LLY)Mounjaro’s developer, has proven it can compete with Novo Nordisk at a high level. Additionally, Mounjaro’s sister drug, Zepbound, has had a blistering start since it was approved last November to help with weight loss. With more than $1.2 billion in sales in the three months ended June, Zepbound has already earned “blockbuster drug” status, given to drugs that sell more than $1 billion in a year.

It is almost enough to make us “forget” Mounjaro.

Let’s break down how Zepbound is helping transform Lilly and assess what the long-term picture might hold.

Zepbound seems unstoppable

Often, when a new drug receives approval from the Food and Drug Administration (FDA), that approval is granted for the treatment of a single disease.

For example, Ozempic is technically only approved for the treatment of diabetes. However, weight loss is often a consequence of taking diabetes medications. But since Ozempic is not officially approved for chronic weight management, Novo Nordisk launched a separate drug called Wegovy, aimed specifically at treating obesity. It’s important to note that Ozempic and Wegovy share the same lead compound, semaglutide.

Eli Lilly followed a similar model to Novo Nordisk. Mounjaro is Lilly’s answer to Ozempic and is used in the treatment of diabetes.

Last year was Mounjaro’s first full calendar year on the market. The diabetes drug is expected to generate $5.2 billion in annual sales for Lilly in 2023, making it the company’s second-largest revenue generator. income.

While Mounjaro has undoubtedly been a monumental success, Lilly has also been working on another project behind the scenes. Like Novo Nordisk, Lilly has been developing an alternative version of its diabetes drug, Zepbound, which aims to treat obesity and also shares its main ingredient, tirzepatide, with Mounjaro.

Zepbound received FDA approval in November 2023 and has been nothing short of a success since its launch:

The story continues

In the first quarter of 2024, Zepbound generated $517 million in sales, which puts it on track to reach annual revenue of about $2 billion. But according to Lilly’s second-quarter earnings report, Zepbound has already demolished its revenue forecast.

For the quarter ended June 30, Zepbound reported sales of $1.2 billion, making it a blockbuster drug with less than a year on the market.

The best part? The journey seems to have just begun…