Core Viewpoint - Eli Lilly is experiencing a strong start in 2024 but faced challenges in the second half of the previous year, with financial results not meeting high investor expectations. However, the company is gaining momentum and anticipates significant catalysts that could boost its stock price in 2025, making it a solid long-term investment option [1]. Group 1: Weight Management Drug Market - Eli Lilly is a leader in the weight management drug market, with its dual GLP-1/GIP medicine, Zepbound (tirzepatide), generating nearly $5 billion in sales last year after its late 2023 approval [2]. - Zepbound is administered via subcutaneous injection once a week, while there is a growing interest in developing oral anti-obesity medications that could attract more patients [3]. - Eli Lilly is developing orforglipron, a potential oral therapy currently in phase 3 studies for weight management, with results expected this year. If successful, it could become the first oral weight management medicine approved by the FDA [4]. Group 2: Competitive Landscape - Novo Nordisk recently faced a setback with its weight loss candidate CagriSema, which could enhance Eli Lilly's position in the market if orforglipron performs well [5]. - Orforglipron is also undergoing late-stage studies for other indications, including sleep apnea and diabetes, which could further impact its overall performance [6]. Group 3: Financial Performance and Future Prospects - Eli Lilly's revenue growth dropped 32% year-over-year in 2024, totaling $45 billion, but the company is expected to generate significant sales from newer products like Ebglyss and Kisunla, which are projected to be blockbusters [8][9]. - The company has a robust pipeline, including retatrutide, another promising weight loss treatment in late-stage studies, which mimics the action of three hormones [10]. - Eli Lilly's innovative potential and strong lineup across various therapeutic areas, including immunology and oncology, make it an attractive long-term investment regardless of the outcome of orforglipron [11].

Industry Overview - The global anti-obesity drug market is projected to generate $12.8 billion in sales this year, with expectations to grow to $104.9 billion by 2035 [1] - Demand for effective weight management drugs is significant, indicating a robust market potential [1] Company Analysis: Novo Nordisk and Eli Lilly - Novo Nordisk currently markets the top-selling GLP-1 drug but is losing market share to Eli Lilly's tirzepatide, marketed as Zepbound [2] - Eli Lilly's Zepbound is experiencing soaring sales, while Viking Therapeutics is developing a potential competitor, VK2735, which may outperform Zepbound based on early clinical trial data [3][4] Viking Therapeutics - Viking Therapeutics' VK2735 showed a 13.1% average weight loss in a phase 2 trial after 13 weeks, suggesting potential for better performance compared to Zepbound's 17.8% reduction after 72 weeks [5][6] - Despite positive phase 2 results, Viking Therapeutics has not yet initiated a phase 3 trial for VK2735, leading to a 70% drop in its stock price from last year's peak [8] - The company also reported successful phase 2 results for VK2809, but has not started the necessary phase 3 trial [9] Eli Lilly's Growth - Eli Lilly's fourth-quarter revenue, including sales from both tirzepatide brands, increased by 45% year over year to $13.5 billion, with significant growth in other drug categories as well [10][11] - The company expects total sales to grow by 32% in 2025, supported by multiple recently launched therapies [12] - Eli Lilly's retatrutide, an experimental triple hormone receptor agonist, demonstrated a weight reduction of up to 24.2% after 48 weeks, with ongoing phase 3 trials expected to yield results by the end of 2025 [13] Investment Outlook - Viking Therapeutics is considered a high-risk investment due to delays in advancing its pipeline, making it less attractive for investors [14] - Eli Lilly, despite a high valuation, is positioned for faster growth and is likely to provide positive long-term returns, making it a more favorable investment option [15]