Where Will Eli Lilly Be in 10 Years?

Core Viewpoint - Eli Lilly is currently performing well, driven by the success of its GLP-1 drugs, but faces potential risks in the long term due to patent expirations and competition from other pharmaceutical companies [1][10]. Group 1: Company Performance - Eli Lilly's stock has a P/E ratio of 50, which is below its five-year average of 54 but high compared to the S&P 500's P/E of 28.5 [1]. - The company's GLP-1 drugs, Mounjaro and Zepbound, are leading the market, with Mounjaro's sales increasing by 109% year-over-year and Zepbound's sales rising by 185% in Q3 2025 [2]. - Overall sales for Eli Lilly increased by 54%, indicating strong demand for weight loss and related drugs in the pharmaceutical sector [4]. Group 2: Competitive Landscape - Eli Lilly was not the first to market with GLP-1 medications, as Novo Nordisk initially led the space, but Lilly's products have gained popularity, allowing it to surpass Novo Nordisk [5]. - Pfizer is actively working to catch up in the GLP-1 niche, having acquired a company with a strong GLP-1 candidate and signed a distribution deal with another company [6]. Group 3: Patent and Future Risks - Eli Lilly's patent protections for Mounjaro and Zepbound are expected to last about ten years, after which generic competition could significantly reduce revenue [7]. - Currently, Mounjaro and Zepbound account for over 50% of Eli Lilly's top-line income, highlighting the potential impact of patent expirations on future earnings [10]. - Investors are advised to consider the high valuation of Eli Lilly, as any loss of market leadership in the GLP-1 space could lead to a contraction in its valuation [12].