Eli Lilly's Alzheimer's Drug Obtains FDA Approval. Here's Why the Stock Isn't Taking Off.

Core Viewpoint - Eli Lilly's Alzheimer's treatment, Kisunla, received FDA approval, but the stock did not experience a significant increase, indicating that the approval was already anticipated by investors [1][2]. Group 1: FDA Approval and Market Reaction - The FDA approved Kisunla, which has the potential to generate $5 billion in annual revenue at its peak [4]. - The approval was largely expected, as an FDA advisory panel had previously shown unanimous support for the treatment [2]. - The stock experienced a brief decline after the approval, reflecting a "buy the rumor, sell the news" scenario [3]. Group 2: Revenue Diversification and Growth Potential - Eli Lilly's stock has doubled in the past year primarily due to its potential in the anti-obesity market, particularly with GLP-1 treatments like Zepbound and Mounjaro, which could generate$50 billion in peak annual revenue [4][5]. - The approval of Kisunla is a positive development, but the excitement around GLP-1 treatments has been the main driver of investor interest [5]. Group 3: Future Outlook - Despite the stock's lack of immediate gains post-approval, there is still significant growth potential for Eli Lilly as it expands its production capacity [6]. - The stock is currently trading at a high valuation of over 130 times earnings, but long-term investors may still find opportunities for growth [6].