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

Original from: Financial Times

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 finished 1.6 per cent higher at $1,059.70 on Friday, taking its gain this year to almost 40 per cent as it pulled ahead of its main rival Novo Nordisk in the battle to dominate the obesity market. The stock advanced as much as 2.2 per cent during intraday trading. Although it was unable to hold those gains to the closing bell, it still ended the session with a trillion-dollar valuation.

The rapid rise in Lilly’s stock in the past few weeks was partly due to investors moving away from large technology companies chasing artificial intelligence growth, said Rick Bradt, a portfolio manager at Neuberger Berman.

He said fears of the AI bubble bursting had “precipitated a massive sector rotation”. As a result, “you have seen a broad-based outperformance in healthcare. Lilly stands alone in the pharmaceutical pack on all levels.”

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 on optimism that the threat of US tariffs and cuts to drug prices, which have hung over the industry since President 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.

As Lilly’s share price has shot higher, the Lilly Endowment, the company’s biggest shareholder, has been selling stock.

The endowment has sold a record $2.4bn of the company’s stock in the fourth quarter of 2025, up from the previous record of $1.3bn in the second quarter of 2024, according to data from VerityData/TMX Datalinx, which tracks stock sales.

“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.

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