Needles, Pills, and Profit
My dears, Eli Lilly’s first quarter of 2025 reads like a well-appointed parlor—every furnishing deliberate, every asset burnished, and not a speck of dust in sight. Revenue surged 45% to $12.7 billion, a staggering leap driven largely by a triumphant duo: Zepbound and Mounjaro. The former’s anti-obesity campaign netted $2.3 billion, while the latter strutted in with $3.8 billion from diabetes prescriptions. It’s a pharmaceutical cotillion, and Lilly’s leading the dance.
Earnings per share rose to $3.06 on a GAAP basis and $3.34 non-GAAP, even with a princely $1.57 billion spent on in-process R&D—mostly toward a promising oncology agent, STX-478. Meanwhile, orforglipron, the company's oral GLP-1, revealed itself as quite the debutante with statistically significant Phase 3 results. She may yet join the main event come Q4 filings.
But let us not get carried away by glamour. Costs also ballooned—operating expenses rose 48% year-on-year—and Lilly's shopping habits remain lavish. Still, between a reinforced balance sheet and increased U.S. manufacturing commitments ($50 billion since 2020), one suspects this is less a spree and more a dynasty solidifying its rule.
In sum: Lilly has outpaced its rivals not merely with science, but with strategy. Should the regulatory winds favour them—as they often do for those who lobby with lace gloves—this grand old house may yet add another wing.
Granny’s Verdict: Allocate.
