Is Eli Lilly Stock a No-Brainer Buy After Its FDA Alzheimer's Disease Drug Win?

Core Viewpoint - The FDA approval of Kisunla (donanemab) is a significant milestone for Eli Lilly, enhancing its position in the Alzheimer's treatment market and potentially boosting its stock performance [1][2]. Group 1: FDA Approval Impact - Kisunla is now one of eight FDA-approved treatments for Alzheimer's disease, presenting a substantial commercial opportunity with peak annual sales estimates around $5 billion [2]. - Kisunla is positioned to be less costly for payers compared to competitors, as it is the only FDA-approved drug targeting amyloid plaque that allows for dosing cessation once plaques are cleared [2]. Group 2: Growth Drivers - Beyond Kisunla, Eli Lilly's growth is driven by its diabetes and obesity drugs, particularly Mounjaro and Zepbound, which are expected to dominate a market projected to reach $77 billion to $100 billion by 2030 [4]. - The company is also exploring treatments for metabolic-associated steatohepatitis (MASH/NASH), with analysts predicting this market could exceed $100 billion [5]. Group 3: Valuation Considerations - Despite the positive outlook from recent FDA approvals and growth opportunities, Eli Lilly's stock is trading at a high forward price-to-earnings ratio of nearly 67, indicating that growth expectations are already reflected in the share price [6]. - The company's diverse pipeline and market opportunities suggest robust long-term growth potential, although careful consideration of valuation is necessary for investors [6][7].