Eli Lilly, the Queen of Obesity Drugs! The dual style of “defensive” and “growth”! Bullish earnings forecasts

As concerns about the US recession intensify, there is growing interest in defensive stocks such as pharmaceuticals and public services. Meanwhile, although the economy is slowing down, there is also a strong view that recession can be avoided. Under such a market environment, it may be better to incorporate growth stocks and defensive stocks in a well-balanced manner rather than a portfolio that is extremely biased towards either.

Eli Lilly's good performance stands out
When I checked the financial results for the April-6 fiscal year for major pharmaceutical brands, it was Eli Lilly that both sales and adjusted EPS (profit per share) greatly exceeded market expectations. Specifically, while the upside rate of most pharmaceutical brands remains in the first half of the 1-digit range, Eli Lilly's sales forecast the market13.2%Market forecast for adjusted EPS50.2%I was able to improve.

The obesity drug “Zepbound” is doing well
Eli Lilly, founded by Colonel Eli Lilly in 1876, is a long-established pharmaceutical giant with a history of nearly 150 years. It is famous as the company that realized mass production of insulin preparations for the first time in the world in 1923, but now it is also attracting attention as a representative company for obesity drugs.

The company's obesity drug “Zepbound” was approved by the U.S. Food and Drug Administration (FDA) in 2023/11, and sales began at pharmacies in the United States from the following December.Sales volume of “Zepbound”What is the fiscal year 2023/10-12 when sales first started$0.48 billion(Sales composition ratio was 1.9%), but for the fiscal year ending 2024/4/4/61.24 billion dollarIt swelled to (same 11.0%). The scope of application of “zepbound” prescription drugs is rapidly expanding in the United States, and as of 7/1, the access rate in the commercial sector has reached about 86%.

High growth is expected to continue in the second half of the year, supported by strong sales of diabetes medications and obesity drugs
The fiscal year ending 2024/4/4 compared to the same period last year36% increase in salesIt became. The diabetes drug “Manjaro” and the obesity drug “Zepbound” contributed to a drastic increase in sales. To support the strong performance of our main products,High growth is expected to continue in the second half of the yearIt became.

After the financial results were announced, by analystsIncrease in target stock pricesstood out.

Is there great potential for growth in the medium to long term
As of now, Novo Nordisk is leading the obesity drug market,Eli Lilly is rapidly catching up. The fact that light and dark were divided between the two companies in the financial results for the April-6 fiscal year may indicate part of that composition. In particular, the fact that Eli Lilly drastically revised its full-year sales forecast upward seems to be useful in dispelling concerns about production capacity. This is because demand exceeds supply in the obesity drug market.

Note, the global anti-obesity drug market size is predicted to grow from 6.15 billion dollars in 2024 to 37.94 billion dollars by 2032, and the average annual growth rate (CAGR) is expected to be 25.5% (from Fortune Business Insights). Therefore,There is great potential for growth in the medium to long termSeemably.

Considering that uncertainty is currently increasing in the macroeconomic and market environment, Eli LillyA dualistic brand that combines the characteristics of “defensive” and “growth”It seems that it will attract more and more attention.