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With all the focus on AI and Nvidia’s latest quarterly earnings, it would be easy to miss Eli Lilly becoming the first healthcare company to be valued by the market at $1 trillion.
How has the company got to this point and why should it matter to investors?
The pharmaceutical business joins just a handful of technology companies and Warren Buffett’s Berkshire Hathaway vehicle in reaching this valuation milestone.
While being a $999 billion company or a $1 trillion one doesn’t make any practical difference it is a measure of how much interest Eli Lilly is attracting. Over the last month Eli Lilly (or Lilly for short) has seen its shares advance 30%, extending gains over the last six months to 46%. This comfortably outstrips Nvidia, which is up by around a third. Roughly $700 billion has been added to Lilly’s market value since 2022 when the boom in weight-loss drugs first took hold.
The obesity market took off after the development of a class of drugs called GLP-1s (GLP standing for Glucagon-Like Peptide) which mimic a natural hormone in the body that helps regulate appetite and blood sugars.
Analysts at Morgan Stanley estimate the obesity market could generate $150 billion in annual sales in the next decade.
Why are investors so excited about Eli Lilly?
Currently there are only two approved obesity treatments available, Lilly’s Zepbound and Danish rival Novo Nordisk’s Wegovy.
Wegovy was approved for chronic weight management by the US FDA (Food and Drug Administration) in June 2021, more than two years before Lilly’s treatment received the green light in November 2023.
Despite Wegovy’s head start Lilly’s recent quarterly results revealed that Zepbound and diabetes treatment Mounjaro now account for 58% of the US market, overtaking Novo Nordisk as the number one player.
Zepbound sales have continued to beat analysts’ forecasts during 2025, in sharp contrast to Novo Nordisk which has reduced its obesity sales forecasts four times, leading to the exit of president and CEO Lars Fruergaard Jørgensen in August 2025.
Incoming CEO Mike Doustdar has announced a plan to cut around 11% of the workforce and double down on its core obesity and diabetes franchise. Novo Nordisk shares have shed around 60% of their value over the last year.
In a recent interview with Dan Coatsworth, Head of Markets at AJ Bell, Fundsmith founder Terry Smith, a shareholder in Novo Nordisk, described its performance as “the best example I have ever seen of snatching defeat from the jaws of victory”.
In addition to better execution, a factor helping the relative success of Zepbound is that it is proving to be more effective. In May 2025 a head-to-head comparison showed Lilly’s Zepbound helped patients shed more weight than Wegovy.
This is believed to be related to the dual action mechanism of Zepbound which leads to greater appetite suppression and metabolic benefits.
What happens next?
Investor attention is now turning to the next generation of obesity drugs in development which include monthly injections rather than the current weekly injections and daily oral pills.
Novo Nordisk is ahead in the race to develop an oral obesity pill and has already submitted a New Drug Application in the US with approval expected by the end of 2025 or in early 2026.
In clinical trials patients taking the daily pill lost nearly 14% of their bodyweight over 64 weeks.
Eli Lilly’s oral pill Orforglipron has a different chemistry to the injectable version and in clinical trials patients lost an average 11% of their bodyweight on the highest dose.
The company expects to apply to the US regulator before the end of 2025 with potential approval in 2026. Analyst Geoff Meacham at Citi believes Orforglipron could generate peak annual sales of more than $40 billion.
It is important to note the obesity market is likely to become a lot more competitive over the next few years.
Clinical services company IQVIA estimates there around 160 new medicines being investigated by private companies to treat obesity.
Meanwhile, large pharmaceutical groups including AstraZeneca and Amgen and smaller biotechnology companies like Viking Therapeutics, Zealand Pharma, and Structure Therapeutic are also developing weight-loss therapies.
Martin Gamble: Shares and Markets Writer
Martin Gamble is Shares and Markets writer at AJ Bell. He was previously the Education Editor of Shares Magazine. He has been with the business since 2019.
Martin graduated from the University of Kent in...
