Company Overview
Eli Lilly made history last month by becoming the first healthcare company ever to reach a $1 trillion market capitalization, propelled by the explosive success of its GLP-1 franchise. The company’s tirzepatide-based drugs—Mounjaro for diabetes and Zepbound for obesity—generated a combined $10.1 billion in Q3 2025, surpassing Merck’s Keytruda to become the world’s best-selling pharmaceutical product.
Just last week on December 1st, Lilly announced further price cuts for Zepbound vials on its LillyDirect platform, lowering cash prices to $299-$449 per month from the previous $349-$499 range. This move extends the company’s aggressive direct-to-consumer strategy that now accounts for over one-third of new Zepbound prescriptions. The timing is strategic: with Novo Nordisk’s Wegovy facing supply constraints and Lilly’s oral GLP-1 pill orforglipron on track for regulatory submission by year-end, the Indianapolis-based pharma giant is cementing its dominance in a market projected to reach $150 billion by 2030.
Key Technical and Fundamental Drivers
Historic Milestone → First $1T Healthcare Company Lilly’s stock surge past $1 trillion market cap last month marks a watershed moment for the healthcare sector, driven entirely by the unprecedented success of its GLP-1 obesity and diabetes franchise.
World’s Best-Selling Drug → $10.1B Quarterly Combined Q3 sales of Mounjaro ($6.5B) and Zepbound ($3.6B) totaled $10.1 billion, dethroning Keytruda as the world’s top-selling drug with 109% and 185% year-over-year growth respectively.
Fresh Price Cuts → December 1st Announcement Last week’s Zepbound price reduction to as low as $299/month on LillyDirect demonstrates Lilly’s commitment to accessibility while maintaining volume growth through its direct-to-consumer channel.
Oral GLP-1 Breakthrough → Year-End Submission Positive Phase 3 data for orforglipron showed up to 27.3 lbs average weight loss at 72 weeks, with Lilly on track to submit to regulators by year-end and potentially launch the first convenient daily pill option in 2026.
Analyst Upgrades → $1,300 Targets Multiple firms including Morgan Stanley ($1,290), Bernstein ($1,300), and Bank of America ($1,286) have raised price targets, seeing 20-25% upside from current levels around $1,050.
Market Takeaway
Eli Lilly represents the clearest pure-play on the obesity and diabetes mega-trend reshaping healthcare. The company’s decision to cut Zepbound prices last week while simultaneously posting record sales demonstrates a counterintuitive but powerful dynamic: lower prices are driving massive volume growth that more than offsets per-unit revenue declines. Q3 revenue jumped 54% to $17.6 billion even as realized prices fell 10%, with volume increases of 60% for Mounjaro and Zepbound carrying the day.
The strategic moat is deepening. LillyDirect now bypasses traditional pharmacy benefit managers who have been pressuring GLP-1 pricing, giving the company direct customer relationships and better margins. The pending launch of orforglipron as the first convenient oral GLP-1 pill could be transformational—addressing patient concerns about injections while potentially being easier to manufacture at scale. Analysts project orforglipron alone could generate $12.7 billion by 2030, with the triple-action retatrutide adding another $5.6 billion.
The investment case centers on market expansion and sustained dominance. With fewer than 10% of eligible patients globally expected to have access to GLP-1s by 2030 due to manufacturing and affordability constraints, the addressable market remains vastly underpenetrated. Lilly’s manufacturing investments, pricing initiatives, and next-generation pipeline position it to capture an outsized share of what Evaluate Pharma projects will be $113 billion in total prescription drug sales by 2030—nearly triple today’s $41 billion base.
Risk factors include intensifying competition from Novo Nordisk’s next-generation molecules, the potential for government price controls under various healthcare reform proposals, and the concentration risk of having tirzepatide represent over half of total company revenue. However, with the stock up 36% year-to-date but still trading at 33x forward earnings (below its 5-year average of 34.5x), the valuation appears reasonable given the growth trajectory. For investors seeking exposure to one of healthcare’s most durable secular trends, Lilly offers both current dominance and a robust pipeline to defend that position well into the next decade.