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According to Goldman Sachs, Eli Lilly stock could rise 140 percent by 2028 as millions of Americans take their GLP-1 weight loss drugs.
The company estimates that if all GLP-1 trials are successful, 68 million Americans could be taking the drugs by 2028.
“Total annual revenue could reach $400 billion (€365 million) if all 23 upcoming trials are successful,” Goldman said.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by an editor.
Pharmaceutical company Eli Lilly’s shares have soared over the past year, but could still rise significantly, according to a new analysis from Goldman Sachs. The bank said the rapid rise of GLP-1 diabetes and weight-loss drugs such as Eli Lilly’s Mounjaro and Zepbound and Novo Nordisk’s Ozempic and Wegovy could lead to as many as 68 million Americans becoming so by 2028 Take medication, which corresponds to about 20 percent of the country’s population.
This potential success could push sales of GLP-1 drugs to $400 billion (€365 billion), well above Wall Street estimates that only 100 GLP-1 drugs will be sold by 2030 billion dollars (91 billion euros) in sales. “Total annual revenue has the potential to reach $400 billion (€365 billion) if all 23 upcoming trials are successful, production is able to meet growing demand and pricing is consistent with our previously published models,” said Goldman analysts.
While much needs to go right for Goldman’s prediction to come true, the bank underscored that investors underestimated how far-reaching GLP-1 drugs can go beyond obesity, comparing the drugs to a platform similar to Apple’s iPhone and the E -Commerce business of Amazon. “With the recent success of the GLP-1s, we believe Eli Lilly, Novo Nordisk and others have the opportunity to expand into categories far beyond what most investors are currently considering,” Goldman said.
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What are the prospects of GLP-1 drugs?
The key GLP-1 trials that investors should keep an eye on are Synchroniza-Cvot, Fedefine-3 and Surmount-MMO from Boehringer Ingelheim, Novo Nordisk and Eli Lilly respectively, the company said. These studies examine the benefits of taking GLP-1 drugs to treat cardiovascular disease regardless of patients’ weight. If they meet their primary endpoints, the trials could open the floodgates to insurance coverage of GLP-1 drugs and increase demand for GLP-1 drugs by 9 million people, Goldman said.
The company said the studies, expected to be published in 2026 and 2027, would likely support Food and Drug Administration (FDA) approval of GLP-1 drugs to treat cardiovascular disease. “While we estimate that this FDA approval will only increase the approved population by two million, we see the potential for these trials to expand companies’ insurance coverage by an additional 40 percent, given other drugs approved for this indication are typically covered are,” Goldman explained.
The bank added that these studies could prompt US public health insurance programs Medicare and Medicaid to cover the cost of the drug to treat cardiovascular disease. GLP-1 drugs are also being studied for their potential use in treating obstructive sleep apnea, chronic kidney disease, liver disease, knee osteoarthritis and even Alzheimer’s disease.
With the new indications for GLP-1 drugs likely to come, according to Goldman, more and more people are likely to take the drugs, helping Eli Lilly to see a significant increase in revenue and profits. “In our view, GLP-1-based medicines will have a profound impact on people’s health, the manufacturers of these medicines and the healthcare system in general over the next decade. “In many of the scenarios we envision, annual revenue from this class of prescription drugs will be the largest ever,” Goldman Sachs said.
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Goldman Sachs predicts a sharp rise in share prices if the drugs are approved
Goldman Sacs
This means that Eli Lilly stock could have even more potential than is currently priced into its stock prices. In Goldman’s most optimistic scenario, which assumes Eli Lilly captures 50 percent of the GLP-1 market, builds sufficient supply and achieves profit margins comparable to blockbuster drugs, Eli Lilly stock could more than double and a Reach a market valuation of 1.2 trillion dollars (1.1 trillion euros).
This is consistent with the thinking of billionaire investor Ken Langone, who claimed last week that Eli Lilly would become the first trillion-dollar drug company in history. Despite the optimistic forecasts, Goldman still rates Eli Lilly at Neutral with a price target of $600, representing a potential upside of five percent from current levels.
Read the original article in English here.