Eli Lilly and Company (NYSE: LLY) is one of two pharmaceutical stocks behind the weight loss drug craze that has impacted the stock market and healthcare system. Shares have performed well in 2025, with a total return of 12% as of the Feb. 11 close. Contributing meaningfully to the stock's rise so far this year was the firm’s Q4 2024 earnings report on Feb. 6. Sales of the company’s GLP-1 drugs are still red-hot.
But does this mean a rally in Eli Lilly is likely to continue? Below, I’ll discuss essential points from the earnings report and management commentary. I’ll then provide an outlook on the company's shares.
Lilly’s Results Send Shares Higher After Guidance Reset
On the top-line, Lilly’s revenue grew by 45%, a brisk pace that was in line with expectations. Earnings more than doubled, beating analyst estimates by 6%. Mounjaro and Zepbound, the company’s key drugs, showed strong growth. Mounjaro and Zepbound both contain the same drug, tirzepatide. Mounjaro helps treat type 2 diabetes, while Zepbound is for obesity.
Mounjaro sales rose 60% compared to Q4 2023. Zepbound sales rose by 985% to $1.9 billion. However, Q4 2023 was the first quarter Zepbound was available for prescription, a key reason for the astronomic rise. Zepbound sales growth of 52% from Q3 2024 is still highly impressive and provides a fairer view of the drug's sales growth. Despite these rapid growth rates, sales for Mounjaro and Zepbound fell well short of initial analyst predictions. Estimates for this earnings release were reset after the firm released a preliminary update on Jan. 14. The press release resulted in shares plummeting over 6%.
Lilly: Taking Market Share, and for Good Reason
Overall, these sales helped Lilly continue closing its gap with Novo Nordisk A/S (NYSE: NVO) in the U.S. incretin analogs market. Incretin analogs include injectable GLP-1s, oral GLP-1s, and GLP-1/GIP dual agonists. Lilly has been steadily gaining market share on Novo Nordisk since May 2024. It now controls nearly 49% of the market, while Novo controls 51%. This is a 5% improvement compared to Q4 2023.
Much of this market share gain is due to studies showing that Zepbound is more effective in creating weight loss than Novo’s competing drug, Wegovy. Top-line results from the Phase 3b SURMOUNT-5 study showed that Zepbound provided 47% greater relative weight loss compared to Wegovy. Lilly has also been able to rectify issues around keeping up with demand much faster than Novo, another likely contributor to its market share gain. Novo still has its drug, semaglutide, on the Food and Drug Administration (FDA) shortage list, while the FDA removed Lilly’s in Oct. 2024.
What’s Next For Lilly, and Is It a Buy?
Overall, Lilly has a few key ways it can continue to support and expand its expected growth in 2025. First, the company now has the production capacity to prevent a sales bottleneck. Management says it will be able to make 60% more tirzepatide in the first half of 2025 than it did in the same 2024 period. The company also expects Phase 3 trial readouts of its oral incretin drug, orforglipron. It expects results in Q2 for diabetes and in Q3 for obesity. Successful results would be huge.
The drug will probably cost much less than tirzepatide. This is because pills are easier to make and store than injectables. This could significantly expand who could access incretin drugs. A recent study from the American Journal of Managed Care found that leaders of big U.S. health plans see high costs as the main barrier to coverage for incretin drugs. Lilly also estimates that 20% to 25% of U.S. patients have needle fear. A pill form of medication could expand accessibility to these folks.
With supply concerns addressed, Lilly plans to launch global access to orforglipron “as rapidly as possible” in early 2026. Overall, the possibility of huge near-term upside in Lilly shares hinges largely on the orforglipron results. I won’t speculate on how these results may turn out. I believe Lilly's success in making the most effective approved incretin drug gives it a big edge in this area. This stock is a long-term allocation. It could really excel with its other incretin candidates, even if orforglipron falls short. This provides a long-term opportunity for a market some believe could reach $150 billion in value. The average price targets from Wall Street analysts still see a solid upside in shares of nearly 15%.
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