Eli Lilly’s (LLY) stock soared over 60% this year due to its dominance in the obesity drug market, where its products Zepbound and Mounjaro have become blockbusters. The company’s drugs, which control blood sugar levels and appetite, have reported double-digit quarterly revenue growth.
A shortage of tirzepatide, one of Lilly’s key products, threatened the company’s sales but recent news from the FDA lifted this risk. The regulatory agency declared that there is no longer a shortage of tirzepatide, and compounding pharmacies must stop selling their alternate versions. This positive development means patients will have to turn to Eli Lilly for its products, benefiting the company’s revenue.
Lilly’s weight loss drugs work by controlling blood sugar levels and appetite, with recent studies showing promising results. The company has applied for regulatory review of these drugs in additional indications, including heart failure and sleep apnea. Approval in these areas could expand Zepbound’s patient base and increase revenue.
The FDA removed tirzepatide from the shortage list, stating that supply meets or exceeds current demand. This allows Eli Lilly to benefit fully from the increased demand for its products. The company has a wide range of other drugs across treatment areas, which delivered double-digit revenue growth in recent quarters.
Eli Lilly’s stock trades at 57x forward earnings estimates, down from over 70x just a few months ago. Despite this, the future looks brighter than ever, making Eli Lilly a top pharma stock to buy for 2025 and hold onto for the long term.
Source: https://www.fool.com/investing/2024/12/23/does-this-news-from-fda-make-eli-lilly-2025-buy