Orforglipron Launch And R&D Will Expand Global Healthcare Access

Key Takeaways

• Launch of innovative oral diabetes and obesity therapy and robust R&D pipeline extend global reach and drive multi-year growth opportunities.
  
• Expanded manufacturing and digital strategies strengthen supply chain and market uptake, promoting revenue growth, portfolio diversification, and improved margins.
  
• Heavy reliance on a few blockbuster drugs, rising regulatory and pricing pressures, and escalating costs threaten Eli Lilly’s revenue growth, profitability, and long-term sustainability.

Catalysts

Eli Lilly and Company discovers, develops, and markets human pharmaceuticals in the United States, Europe, China, Japan, and internationally.

• The imminent launch and global expansion of orforglipron, the first oral GLP-1 therapy with injectable-like efficacy for type 2 diabetes and obesity, is poised to unlock massive latent demand—especially among patients who prefer oral over injectable therapies and those with needle aversion. This expands Eli Lilly’s global addressable market, accelerates revenue growth, and enhances scalability across emerging and developed markets.
  
• The company’s deep late-stage R&D pipeline in high-prevalence chronic diseases—including ongoing development and planned regulatory submissions across diabetes, obesity, cardiovascular, immunology, and neuroscience—positions Eli Lilly to capitalize on the aging population and increased disease burden, ensuring a longer runway for blockbuster product launches and multi-year revenue and earnings expansion.
  
• Rapid manufacturing investment and geographic expansion, exemplified by over fifty billion dollars in new U.S. manufacturing commitments and increasing production capabilities, give Eli Lilly a significant supply chain advantage to meet surging demand for its therapies across global markets, supporting both volume-driven revenue growth and improvement in gross margins through operational scale and mix.
  
• Ongoing advances in clinical data, new indications, and the pursuit of combination and multi-functional therapies—such as triple agonists and novel oral agents—will create portfolio diversification and support premium pricing strategies, which together reduce product concentration risk and provide durable drivers for long-term earnings growth and margin expansion.
  
• Strategic focus on digital health, including platforms that support patient adherence and real-world evidence generation, will facilitate superior commercialization and uptake for its therapies, especially as patient populations and healthcare access expand worldwide, further bolstering net revenues and sustaining margin improvement.

Eli Lilly Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Eli Lilly compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Eli Lilly's revenue will grow by 27.0% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 22.7% today to 37.2% in 3 years time.
• The bullish analysts expect earnings to reach $37.4 billion (and earnings per share of $41.57) by about July 2028, up from $11.1 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 34.1x on those 2028 earnings, down from 62.8x today. This future PE is greater than the current PE for the US Pharmaceuticals industry at 18.1x.
• Analysts expect the number of shares outstanding to decline by 0.3% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.4%, as per the Simply Wall St company report.

Eli Lilly Future Earnings Per Share Growth

Risks

• Intensifying pricing pressures, with sustained mid
• to high single-digit price declines in key markets like the US and Europe, along with PBMs favoring competitors and pursuing one-to-one formulary positioning, are already impacting realized prices and threaten to continue eroding overall revenue growth and compress net margins.
  
• The company’s disproportionate reliance on a small number of blockbuster drugs—primarily Mounjaro and Zepbound, which together make up a significant portion of total revenue—exposes Eli Lilly to heightened risk of steep revenue declines or earnings volatility if these products lose market share, face access restrictions, or encounter adverse clinical or regulatory events.
  
• Growing global regulatory scrutiny and policy initiatives—including the risk of price controls, MFN (Most Favored Nation) legislation, and drug reimbursement reforms—could materially restrict Lilly’s pricing power, particularly as international and US healthcare systems focus more on cost containment and value-based pricing, negatively affecting future revenue and earnings.
  
• The increasing cost and complexity of R&D and global manufacturing expansions, combined with heavy acquired IPR&D charges and rising SG&A expenses to support launches, risk outpacing revenue if top-line growth slows, putting sustained pressure on profitability and diluting return on investment.
  
• Long-term sustainability of growth is at risk if the late-stage pipeline underdelivers or if increased competition from biosimilars, generics, or innovative new entrants reduces the market exclusivity period for Lilly’s key drugs, jeopardizing both future revenue streams and high performance margins.

Valuation

• The assumed bullish price target for Eli Lilly is $1190.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Eli Lilly's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $1190.0, and the most bearish reporting a price target of just $650.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $100.5 billion, earnings will come to $37.4 billion, and it would be trading on a PE ratio of 34.1x, assuming you use a discount rate of 6.4%.
• Given the current share price of $776.44, the bullish analyst price target of $1190.0 is 34.8% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.