5. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders as of Q2: 100
Eli Lilly and Company (NYSE:LLY) is one of the stocks that will make you rich in 5-10 years while diversifying an investment portfolio into the healthcare sector focusing on the development and marketing of pharmaceuticals. The pharmaceutical company has become the largest healthcare company by market capitalization, riding a wave of solid financial results and excellent regulatory progress.
Tirzepatide, marketed under Mounjaro and Zepbound, has significantly accelerated the growth of Eli Lilly and Company (NYSE:LLY). Mounjaro and Zepbound had $3.1 billion and $1.2 billion in sales, respectively, in the second quarter. That’s more than $4 billion in sales in just three months in an industry where most drugs never make $1 billion a year at any point in their patent-protected life cycles.
Likewise, Eli Lilly and Company (NYSE:LLY) is already looking into the future as it looks to reduce its reliance on specific drugs. Its pipeline of late-stage development includes multiple products that show promise. It is developing two weight loss medications, orforglipron and retatrutide, which, by some estimates, could each bring in well over $1 billion in revenue annually by 2030.
The company’s once-weekly insulin medicine could also earn regulatory approval within the next year or two. Eli Lilly recently achieved yet another significant regulatory victory when the FDA authorized Kisunla, also known as donanemab, as an Alzheimer’s disease treatment.
Eli Lilly and Company (NYSE:LLY)’s dividend plan also appears appealing. Its yield of 0.58% is low, but that’s because its share price has been rising dramatically recently. Over the last five years, the company has increased payouts by 101.6%.
Eli Lilly and Company (NYSE:LLY) was a part of 100 hedge fund portfolios at the end of Q2 2024, down from 109 in the previous quarter, as per Insider Monkey’s database. Fisher Asset Management owned the largest stake in the company, worth over $4.4 billion.
Here is what PGIM Jennison Health Sciences Fund said about Eli Lilly and Company (NYSE:LLY) in its Q2 2024 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a diversified biopharmaceutical company with core franchises in Diabetes, Obesity, Immunology, Neurodegeneration, and Oncology. The company is one of the two global leaders in diabetes with blockbuster products in Trulicity and recently launched Mounjaro (tirzepatide) to serve this large underserved market. To date, the Mounjaro launch is the strongest for any diabetes drug ever launched, which we attribute to off label usage in the obesity indication as well as on label use in diabetes. We believe the tirzepatide (the generic name for Mounjaro) franchise is also uniquely positioned to grow substantially from here thanks to its recent approval for obesity. To that note, in late 2023, Eli Lilly received approval for tirzepatide in obesity and is commercializing it for obesity under a new brand name, Zepbound. While still early in the launch, uptake has been extremely strong, exceeding that of both Wegovy and Mounjaro at the same timepoint in their launches. While Alzheimer’s Disease has been a tough market for drug developers, Eli Lilly has breakthrough designation from the food and drug administration (FDA) for donanemab and recently presented Phase III pivotal trial data that positions donanemab as the most efficacious drug in the class. In June, the FDA advisory committee voted unanimously in favor of donanemab as an effective treatment where the benefits outweigh the risks, praising the therapy as innovative. Donanemab was then approved under the brand name Kisunla in early July. Eli Lilly also has exciting franchises in dermatology, immunology, and oncology that are starting to add meaningfully to growth. With a proven history of strong commercial execution and one of the highest research and development (R&D) success rates in the industry, we see opportunity for continued success. With a lack of meaningful patent expirations for the rest of the decade. Eli Lilly is uniquely positioned amongst its larger-cap peers. Recent positive performance has been driven by the continued strong growth of Mounjaro and Zepbound, which led to a big guidance raise on the 1Q call, an unusual action for Eli Lilly this early in the year, which speaks to their confidence in the strong trends they are seeing.
