Eli Lilly, a name already familiar in the pharmaceutical industry, may be on the cusp of even greater success, as predicted by Goldman Sachs. Their research suggests a massive growth trajectory for GLP-1 diabetes and weight-loss drugs, including Eli Lilly’s Mounjaro and Zepbound, as well as Novo Nordisk’s Ozempic and Wegovy. These drugs, riding a wave of popularity, could see as many as 68 million Americans, approximately 20% of the population, using them by 2028.
This surge in usage could catapult GLP-1 drug revenues to a staggering $400 billion, far surpassing the earlier Wall Street estimates of $100 billion by 2030. Goldman Sachs analysts believe that, under optimal conditions including successful clinical trials, sufficient manufacturing to meet demand, and stable pricing models, this revenue target is attainable.
The bank draws an ambitious comparison, likening the potential of GLP-1 drugs to transformative platforms like Apple’s iPhone and Amazon’s e-commerce. This comparison underscores the far-reaching implications of GLP-1 drugs beyond just obesity treatment.
Key studies to watch, according to Goldman, include SYNCHRONIZA-CVOT, REDEFINE-3, and SURMOUNT-MMO, which are exploring the benefits of GLP-1 drugs in treating cardiovascular diseases, irrespective of patients’ weight. Positive results from these studies could significantly expand insurance coverage for these drugs, potentially adding 9 million users.
Moreover, these drugs are being explored for potential efficacy in treating a range of conditions, from obstructive sleep apnea to Alzheimer’s disease. The success in these areas could further boost the demand and profitability of GLP-1-based medicines, making them one of the most significant classes of prescription drugs.
In Goldman’s optimistic scenario, where Eli Lilly secures half of the GLP-1 market, ensures adequate supply, and maintains high profit margins, the company’s stock could see a monumental rise, potentially reaching a market valuation of $1.2 trillion. This aligns with billionaire investor Ken Langone’s view of Eli Lilly potentially becoming the first trillion-dollar drug company.
Despite these bullish projections, Goldman maintains a “Neutral” rating on Eli Lilly with a $600 price target, suggesting a modest 5% growth from current levels. However, the possibility of Eli Lilly’s transformation into a pharmaceutical powerhouse remains a scenario investors are keenly watching. The next few years could indeed be a game-changer for Eli Lilly and the broader healthcare landscape.