Eli Lilly is at the forefront of two of the pharmaceutical industry’s hottest fields, and it’s paying off for the Indianapolis company’s investors.

Over the past year, Lilly’s valuation has climbed nearly 50% to exceed $400 billion, a few percentage points’ swing away from eclipsing Johnson & Johnson as the world’s largest drugmaker by market capitalization. It’s worth nearly as much as Pfizer, Bristol Myers Squibb and Moderna combined, despite earning less than one-third as much revenue as J&J or Pfizer in 2022.

Lilly’s skyrocketing stock price is largely due to two drugs: the diabetes and weight loss treatment Mounjaro, and the experimental Alzheimer’s treatment donanemab. Investors and Wall Street analysts expect both to become blockbusters in large markets with few established competitors.

On Wednesday, results from a large clinical trial of donanemab in people with mild Alzheimer’s showed treatment slowed cognitive and physical decline by 35% versus a placebo, sending Lilly shares higher by nearly 7%. 

Eoin Treacy's view

The best markets for pharmaceuticals are in chronic conditions. Two of the fastest growing, with unmet need, are obesity and Alzheimer’s. Both are a product of modern living with longer lives and easier access to high calorie intake.


The Alzheimer data was on par with that offered by Eisai/Biogen’s product with worse safety outcomes. That suggests the majority of the boom in the share price has been driven by expectations the diabetes drug will be repurposed to address the massive global weight loss industry.

Eli Lilly broke out to new all-time highs in 2018 and has been trended higher in a consistent manner since. The pace of the advance is now accelerating; driven by a rapid valuation expansion. Continues sales growth will be essential to sustain the trend.  

Rheumatoid arthritis and other autoimmune conditions are an, as yet, unmet needs in the pharmaceuticals market.