Eli Lilly becomes first pharma group to join $1tn club

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Eli Lilly’s weight-loss drugs have made it the first pharma company to hit a $1tn market valuation, a sharp turnaround from this summer when its stock was hit by disappointing results for a new obesity pill.

The Indianapolis-based company joins a small group of businesses valued at more than $1tn, including eight technology giants, as well as Tesla and Warren Buffett’s Berkshire Hathaway.

Shares in Lilly rose were up as much as 2.1 per cent on Friday afternoon to a record high of $1,064.80, having climbed more than 40 per cent this year as it pulled ahead of its main rival Novo Nordisk in the battle to dominate the obesity market.

Lilly more than doubled its sales of weight-loss drugs in the third quarter compared with the same period a year ago after it launched in new markets. Mounjaro, prescribed for diabetes, and Zepbound, used for weight loss, generated a combined $10.1bn in revenue in the quarter.

The surge comes after Lilly’s stock sank in August after disappointing trial results for its new weight-loss pill, orforglipron. But “that was the only negative thing that I can think of for Lilly”, said Karen Andersen, director of healthcare research at Morningstar. “It is kind of hard to poke holes in Lilly’s strategy right now,” she said. “Everything has gone in Lilly’s favour.”

Investors have become increasingly enthusiastic about pharma stocks. The S&P 500 pharmaceutical index has risen more than 25 per cent since late September over optimism that the threat of US tariffs and cuts to drug prices, which have hung over the industry since Donald Trump came to power, is starting to recede.

Earlier this month, Lilly joined a group of three other companies to sign a deal with the White House, agreeing to lower some drug prices in return for access to patients on Medicare and Medicaid and a three-year exemption from potential tariffs.

The agreement will also mean that, if approved, Lilly could launch orforglipron earlier than expected next year. Investors have shown more enthusiasm for Lilly’s pipeline of obesity treatments than for Novo Nordisk’s.

“Lilly remains focused on our commitment to scientific breakthroughs and strategic investments to fuel a robust pipeline that meets patient needs,” Lilly said about hitting the $1tn mark.