On November 21, 2025, Eli Lilly became the first pharmaceutical or healthcare company to enter in trillion-dollar club as the company’s valuation hit $1 trillion. Till now, this club had members namely Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta, Broadcom, and Taiwan Semiconductor Manufacturing Company (TSMC), which are mainly from IT, E-Commerce, or Semiconductor sector. Berkshire Hathaway, Tesla, and Saudi Aramco also figure in this club. Except TSMC and Saudi Aramco, all other companies are US-based. It is interesting to see the journey of a pharma company that figured in this group.

In Q3 of 2025, Lilly reported revenue of $17.60 Bn as against $11.44 Bn in Q3 of 2024, i.e., 54.0 per cent growth YoY. Increase of 54.0 per cent was mainly driven by a 62.0 per cent increase in volume which was partially offset by a 10.0 per cent decrease due to lower realized prices. Revenue from key products grew to $11.98 Bn in Q3 of 2025. Lilly attributed the growth to revenue from key products led by Mounjaro (for Type-2 Diabetes) and Zepbound (for Obesity). Obesity is considered as a major risk factor driving more than 200 associated diseases. The volume increase outside the U.S. was primarily attributed to Mounjaro. Gross margin (as a percentage of revenue) stood at 82.9 per cent, with an increase of 1.9 per cent.

Table 1: Revenue and Volume Growth in Q3 of 2025

Source: Compiled from Lilly’s quarterly release dated October 30, 2025

In Q3 2025, Mounjaro revenue went up by 109.0 per cent to touch $6.52 billion comprising $3.55 Bn revenue from the U.S. market and $2.97 Bn as revenue from outside the U.S. Revenue growth in the U.S. was 49.0 per cent whereas the growth was much higher from outside the U.S. as revenue was $728.0 million in Q3 of 2024 which touched $2.97 for Q3 of 2025.

A valuation of $1 Trillion by any healthcare or pharmaceutical company is not achievable on the strength of just one or two products. Pharmaceutical industry is very large and internationally competitive. There are multiple therapeutic categories, and within each therapeutic category, there are sub-categories. Lilly has well-diversified portfolio as the company’s pharma research focuses on multiple areas such as immunology, metabolism (including diabetes, obesity and cardiovascular), neuroscience, and oncology. As a leading global pharma company, Lilly keeps on expanding the value of existing products through new uses, formulations, and therapeutic approaches, including complementary devices or diagnostic tools.

It took almost 149 years to reach at this milestone of $1 Bn valuation as Eli Lilly and Company was incorporated in 1901 that succeeded the drug manufacturing business founded in 1876 by Colonel Eli Lilly. In 1923, the company introduced ILETIN (animal-source Insulin) which was the world’s first commercially available insulin product, for the treatment of diabetes. In 1940s, the company was among first few companies which could develop a method to mass-produce Penicillin-G, the world’s first widely available antibiotic. The company has many other firsts to its credit, e.g., manufacturing and distribution of the Salk Polio vaccine globally (1955), introduction of ‘Humulin’ (1982) which is insulin product that is identical to the one produced by the human body. Humulin had the distinction of being the world’s first human healthcare product creating by using recombinant DNA technology. 

Table 2: R&D and Marketing, selling, and administrative Expenses

Amount in $ Million

Source: Compiled from Annual Report of FY24 of Eli Lilly and Company

One major contributor in valuation is that the company has remained committed to R&D. By the end of 2024, the company employed approximately 11,000 employees in pharmaceutical R&D activities, including a substantial number of physicians, scientists holding graduate or postgraduate degrees, and highly skilled technical personnel (Annual Report, 2024).  In Q3 2025, R&D expenses of Lilly stood at $3.47 Bn, or 19.7 per cent of revenue in early and late-stage portfolio. For FY24, total R&D expenses amounted to $10.99 Bn. Lilly has laid more emphasis on late-stage R&D over a period of three years as reflected in the amount of R&D expenses on early-stage R&D and late-stage R&D. Overall expenditure on Early-stage as well as Late-stage R&D expenses has gone up.

Table 3: Early-stage and Late-stage R&D Expenses for three years

Amount in $ Mn

Source: Compiled from Annual Report of FY24 of Eli Lilly and Company (p.107)

Besides organic growth, Lilly opted for inorganic growth too and made its largest acquisition in 2019. Loxo Oncology was acquired to broaden treatment options for cancer patients through first-in-class and best-in-class medicines. 

Higher gross margin allows the company to incur marketing, selling and administrative expenses which increased to $2.76 Bn in Q3 2025. For FY24, expenses under this head stood at $8.59 Bn driven by promotional efforts supporting ongoing and future launches.

Top management of the company comprises those leaders who are serving the company from a long term. Stability of the tenure for top management seems to be an advantage for Lilly as pharma R&D is always seen from long-term perspective. David Ricks is the Chairman, President and Chief Executive Officer (CEO) since 2017. He has 29 years of service with Lilly itself. Eric Dozier is the Chief People Officer since 2022 besides being Executive Vice President. He is also serving Lilly from last 28 years.

Patents and trademarks give edge to Lilly, e.g., Mounjaro/Zepbound (Cardiometabolic Health Products) have patent expiry in 2036 (for the USA), 2037 (major European countries), and 2040 (for Japan). Certain patents of Lilly are going to expire in next 2 to 5 years, e.g., Jardiance will lose patent in 2029 in the US/European markets and in 2030 in Japan. Trulicity compound patent will lose expiry in 2027 (in U.S.), and in 2029 in major European and Japanese market. There are patents which have more than decade, e.g., Compound patents of Jaypirca (Oncology), Retevmo (Oncology), Omvoh (Immunology) have expiry in 2037 for the U.S.

Lilly has remained on the forefront through digitalization. On January 4, 2024, Lilly announced LillyDirect, a new digital healthcare experience for patients in the U.S. living with obesity, migraine and diabetes. Through this initiative, Lilly offered disease management resources which included access to independent tele-healthcare providers, tailored support comprising Disease state and healthcare educational information as well as direct home delivery of select Lilly medicines through third-party pharmacy dispensing services.

On November 6, 2025, the company announced an agreement with the U.S. government to expand access to its obesity medicines and reduce patient costs. This agreement is likely to improve access to about 40 million Americans living with obesity on government insurance programs and millions of those Americans who pay out-of-pocket. Hence, the agreement has implications for volume growth in the USA, and resultant positive impact on the revenue. This agreement was in continuation of its earlier agreement of 2020 through which it partnered with Trump Administration on a pilot program. Lilly became the first company to cap out-of-pocket insulin costs at $35 per month.

From above, one can judge that Lilly has earned that space in Trillion Dollar Club through conscious efforts such as consistent investment in R&D, striking balance in Early-stage and Late-stage R&D, focus on innovative products, diversification of portfolio, direct home delivery of select medicines through LillyDirect, spending on Marketing, Selling and Administration, emphasis on volume growth in domestic as well as foreign markets, and retention of key personnel to drive long-term growth.

Dr. Anil Kumar Angrish- Associate Professor (Finance and Accounting), Department of Pharmaceutical Management, NIPER S.A.S. Nagar (Mohali), Punjab

Disclaimer: Views are personal and do not represent the views of the Institute.