To The Moon

It’s an exciting time for $Eli Lilly(LLY)$ . New drugs are hitting the market, manufacturing investments are paying off, and new clinical trials suggest future revenue growth. It feels like there’s a new reason every week to be optimistic about this stock.

Market Potential Could Expand Again

Eli Lilly’s drugs, Zepbound and Mounjaro, are approved for obesity and type 2 diabetes, respectively. Both contain the same active ingredient, tirzepatide.

In Q2 alone, Zepbound racked up $1.2 billion in sales, and Mounjaro brought in nearly $3.1 billion. With the company exploring other uses for tirzepatide, further approvals could significantly broaden the market and boost revenue.

The company is running a Phase 3 trial on tirzepatide for preventing type 2 diabetes. Results from a trial involving 1,032 overweight or pre-diabetic adults showed a 94% reduction in the risk of developing diabetes with weekly tirzepatide treatment over 176 weeks.

Participants on the highest dose lost an average of 22.9% of their body weight. This suggests tirzepatide could be highly effective in preventing diabetes in high-risk groups, potentially expanding its market to include many overweight individuals.

Opportunities Are Far from Over

The full trial results will be submitted for scientific publication and presented at the ObesityWeek conference in early November. A slight increase in Eli Lilly’s stock price following the report wouldn’t be surprising.

However, even with promising trial results, regulatory approval isn’t guaranteed. It’s uncertain whether relatively healthy but overweight individuals will seek treatment or if doctors will recommend it to prevent diabetes.

Still, it’s hard to deny that as Eli Lilly invests more in understanding the full potential of its drugs, the stock becomes increasingly attractive. This likely isn’t the last breakthrough for Lilly, and success here could pave the way for more achievements.