US drugmaker Eli Lilly has reached $1tn in market value, becoming the first pharmaceutical company to achieve the milestone.
The company joins a club once reserved mainly for technology giants such as Nvidia, Amazon and Apple.
The valuation makes Lilly worth more than Walmart and double that of its nearest competitor within the pharma industry, Johnson & Johnson.
The rise in stock price has been largely propelled by Lilly's success in developing anti-obesity drugs for the rapidly expanding weight-loss drug market.
Anti-obesity treatments have emerged as one of the most profitable corners of the healthcare sector.
More than half of the company's quarterly revenue is from its obesity and diabetes portfolio, which includes Zepbound, the company’s GLP-1 therapy for obesity and the diabetes drug Mounjaro.
Both contain the same active ingredient, tirzepatide.
The pair recently surpassed Merck’s cancer drug Keytruda as the world’s best-selling medicine and are projected to be the two fastest-growing drugs in the world in terms of year-over-year sales.
Lilly's closest rival, Novo Nordisk, also has two successful GLP-1 drugs, Ozempic and Wegovy.
However, the Danish company failed to reassure investors about the drugs’ durability or convince doctors that Wegovy is better than Zepbound for weight loss, resulting in sales that fell short of Wall Street's expectations.
Additionally, its stock price recently hit a four-year low after a failed clinical trial investigating the use of GLP-1s for Alzheimer's.
The rest of the pharma industry has begun to follow Eli Lilly's lead, with several companies joining the hunt for better GLP-1 drugs — either by advancing their own programmes, or jumping at deals.
The success of the drugs has made them household names, straining the resources of Lilly and Novo and leading to shortages, which have then been exploited by compounders, creating copycat versions of semaglutide, Novo's GLP-1 drug, as well as Lilly's tirzepatide.
To combat this and meet the market demand, both Lilly and Novo have begun to pour billions into synthetic drug production.
Whether Lilly can sustain its $1 trillion valuation — or follow a trajectory closer to Novo Nordisk’s— will depend on how its pipeline performs.
With one of the first oral GLP-1 weight-loss drugs nearing market, the company is positioning itself to reinforce its leadership in the obesity space and potentially extend its current market run.