Goldman Sachs’ Best Hedge Fund Stock Picks: Top 20 Stocks

10. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Investors in Q2 2024: 100

GS’ Number Of Funds: 20

Eli Lilly and Company (NYSE:LLY) is one of the biggest pharmaceutical and healthcare companies in the world. The firm is at the center of Wall Street’s craze of GLP-1 stocks as we covered in our introduction to this piece. Eli Lilly and Company (NYSE:LLY)’s shares are up by 160% since the 2023 start, primarily because of its potential to target the multi billion dollar weight loss drug market. However, the lucrative nature of this market, coupled with the fact that the first GLP weight loss patents granted in 2014 are now expiring means that in 2024 and ahead, Eli Lilly and Company (NYSE:LLY)  has to deal with a different market that might ask for lower product prices. On this front, the firm made a key announcement in August when it announced $399 2.5 milligram vials of Zepbound to increase the drug’s market access. Eli Lilly and Company (NYSE:LLY)’s sizeable resources, as evidenced by $2.9 billion in cash and equivalents means that its stock can benefit from other new drugs too. Another drug that has been growing sales is Eli Lilly and Company (NYSE:LLY)’s breast cancer medicine called Verenzio.

Baron Funds mentioned Eli Lilly and Company (NYSE:LLY) in its Q2 2024 investor letter. Here is what the firm said:

“Shares of global pharmaceutical company Eli Lilly and Company increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”