Eli Lilly Faces Patent Cliff Risks for GLP-1 Drugs
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Valuation Risks: Eli Lilly's P/E ratio stands at 53, significantly higher than the S&P 500's 28 and the pharmaceutical industry's 30, indicating potential overvaluation and risk for investors amid high expectations for its GLP-1 drugs.
- Significant Sales Growth: In Q3 2025, sales of Eli Lilly's GLP-1 drug Mounjaro surged 109% year-over-year, while Zepbound saw an even more impressive 185% revenue increase, highlighting strong market demand but increasing the company's reliance on these two drugs.
- Patent Cliff Threat: With Mounjaro and Zepbound accounting for over 50% of Eli Lilly's revenue, investors may soon worry about the impending patent expirations over the next decade, which could lead to substantial sales declines and impact financial performance.
- Intensifying Competition: Novo Nordisk has launched an oral version of Wegovy, potentially capturing market share, and while Eli Lilly is developing its own GLP-1 pills, the fierce competition in the industry could pose significant challenges in the future.
Analyst Views on LLY
Wall Street analysts forecast LLY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LLY is 1192 USD with a low forecast of 950.00 USD and a high forecast of 1500 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 1062.750
Low
950.00
Averages
1192
High
1500
Current: 1062.750
Low
950.00
Averages
1192
High
1500
About LLY
Eli Lilly and Company is a medicine company, which discovers, develops, manufactures, markets, and sells pharmaceutical products worldwide. Its cardiometabolic health products include Basaglar; Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, and others; Humulin, Humulin 70/30, and others; Jardiance; Mounjaro; Trulicity; Zepbound; VERVE-102; VERVE-201, and VERVE-301. Its oncology products include Cyramza, Erbitux, Tyvyt, and Verzenio. Its immunology products include Ebglyss, Olumiant, Omvoh, and Taltz. Its neuroscience products include Emgality and Kisunla. The Company is also engaged in radiopharmaceutical discovery, development, and manufacturing efforts, and clinical and pre-clinical radioligand therapies in development for the treatment of cancer. It is also developing an oral small molecule inhibitor of a4b7 integrin for inflammatory bowel disease (IBD). It is evaluating its novel gene therapy candidate, ixoberogene soroparvovec.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
