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Eli Lilly’s diabetes drug Mounjaro beat sales estimates in the second quarter.
Daniel Acker/Bloomberg
Eli Lilly
could reach $50 billion in annual sales from weight-loss drugs by 2030, making the pharmaceutical company one of the big winners from obesity treatments,
J.P. Morgan
analysts said.
The bank’s analysts raised their sales estimates and said the overall weight-loss drugs market could hit $100 billion in annual sales over time.
Eli Lilly
(ticker: LLY) and Denmark’s
Novo Nordisk
(NOVO) are “expected to continue to roughly split the market,” they said. J.P. Morgan also sees an equal split between the obesity market and diabetes market for those sales.
The class of drugs, known as incretins, has been shown to suppress appetite and reduce food intake. J.P. Morgan expects Lilly’s sales from its incretin portfolio to rise from $8 billion last year to $23 billion in 2025 and $34 billion in 2027 before reaching $50 billion in 2030.
“[We] would not be surprised to see further upside to our estimates,” they added.
Lilly is a leader in the space—its Mounjaro drug, approved for diabetes, crushed sales estimates in the second quarter. It has another version with the same active ingredient, tirzepatide, expected to gain approval for obesity later this year.
J.P. Morgan analysts said obesity approval for Mounjaro/tirzepatide was one of a number of important catalysts for the stock later this year and in early 2024. They have an Overweight rating on Eli Lilly stock with a price target of $600, implying a 7% upside from Wednesday’s price.
Novo Nordisk became Europe’s most valuable company earlier this week, leapfrogging luxury conglomerate
LVMH
(MC.Paris), after its weight-loss drug Wegovy was made available in the U.K. The Danish company now has a market capitalization of $432 billion, surpassing the size of Denmark’s economy.
Wegovy, approved as an obesity treatment, shares the same active ingredient as Ozempic, which is approved for Type 2 diabetes.
In the U.S., it would be the 14th most valuable company in the
S&P 500,
nestling in between
UnitedHealth
and
Walmart
.
Eli Lilly, currently the ninth most valuable, has a market cap of $531 billion.
Write to Callum Keown at callum.keown@barrons.com