Oral version of the "miracle weight-loss drug" is crucial, Morgan Stanley asks: Will Eli Lilly be the first pharmaceutical company to reach a trillion-dollar market value?

The Wall Street major banks believe that after surpassing one of the "Seven Giants" Tesla in market value, Eli Lilly still has room for further growth with the breakthrough in GLP-1 technology.

The latest report from Morgan Stanley predicts that Eli Lilly, one of the "weight-loss drug giants," is expected to become the first biopharmaceutical company with a market value of $1 trillion with the oral GLP-1 drug Orforglipron currently in trials.

Oral Weight-loss Miracle Drug

So far, all approved GLP-1 weight-loss drugs have been injectables, which are less convenient to use compared to oral medications.

Therefore, oral GLP-1 weight-loss drugs are generally considered one of the "Holy Grails" in the biopharmaceutical industry. Major pharmaceutical companies such as Novo Nordisk AS, Eli Lilly, Pfizer, and Amgen are all attempting to develop them.

Among them, Eli Lilly's oral weight-loss drug Orforglipron has released data from Phase II trials, showing that participants lost an average of 8.6% to 12.6% of their body weight over 26 weeks of treatment.

JPMorgan analyst Terence Flynn pointed out that the Phase III trial results of Orforglipron, to be announced in 2025, are expected to drive further growth in Eli Lilly's stock price, with a $1 trillion market value on the horizon. Flynn has raised Eli Lilly's target price from $805 to $950, representing a potential increase of over 23%:

Will Eli Lilly become the first biopharmaceutical stock with a $1 trillion market value? We still believe that it has room for further growth.

The GLP-1 series of obesity treatment drugs were initially developed as diabetes treatments. They can help suppress hunger in various ways, including stimulating the pancreas to release insulin, blocking the release of postprandial glucagon to prevent excessive glucose entering the bloodstream, and slowing gastric emptying to reduce overall food intake.

Eli Lilly has already developed the injectable GLP-1 drug Tirzepatide, marketed in versions for diabetes (Mounjaro) and obesity (Zepbound), both of which are among the best-selling GLP-1 drugs globally.

Looking ahead to the prospects of oral GLP-1 drugs, Novo Nordisk AS CEO Lars Furgaard Jergensen has expressed concerns about potential safety issues with the next generation of oral obesity drugs being developed by various pharmaceutical companies.

Fourth Quarter Performance Exceeds Expectations, Eli Lilly Stock Continues to Soar

As one of the weight-loss drug giants, Eli Lilly is the biggest beneficiary in this round of GLP-1 hype, with its stock price skyrocketing by 140% in the past 12 months, far exceeding the increase of its competitor Novo Nordisk AS (75%).The latest earnings report for the fourth quarter shows that Eli Lilly's actual revenue for the last quarter was $9.35 billion, exceeding the consensus expectation of $8.95 billion and significantly higher than the $7.3 billion in the same period last year.

Among them, Mounjaro's quarterly sales increased to $2.21 billion, surpassing the consensus expectation of $1.75 billion. The sales of Zepbound, which was listed in December last year, reached $1.758 billion, higher than analysts' expectations of $750 million. Eli Lilly expects full-year revenue to be between $40.4 billion and $41.6 billion in 2024.

Following the performance announcement, several Wall Street analysts have raised their target prices for Eli Lilly this month, including Societe Generale, Jefferies, and Barclays.

Since 2024, Eli Lilly's stock price has continuously hit new highs, with an increase of up to 35%. As of Friday's close, Eli Lilly's stock price was $782.06, with a market value exceeding $742.4 billion, surpassing its peers in the pharmaceutical sector, and even higher than tech giants such as Tesla, AMD, and Netflix.

If Eli Lilly's market value surpasses $1 trillion, it will become the first company outside the "Big Seven" to enter the "Trillion-Dollar Club," and will be the first pharmaceutical company in history to reach a market value of $1 trillion.

Currently, U.S. companies with a market value exceeding $1 trillion include Microsoft, Apple, Nvidia, Google, Amazon, and Meta. The only non-tech company with a market value higher than Eli Lilly is Warren Buffett's Berkshire Hathaway, which had a market value of $881 billion at Friday's close.