Just a decade ago, Eli Lilly and Co. was struggling. But now, the company is continuously growing and thriving. Photo courtesy of Google.

News Release

INDIANAPOLIS — Over a decade ago, Eli Lilly and Co. was struggling. The drugmaker’s channel dried up, creating only two new medicines from 2005 to 2013, neither of them becoming bestsellers. Their highly anticipated Alzheimer’s drug, semagacestat, flopped when it failed to perform better than a placebo in a late-stage clinical trial. Patents for some of the company’s highly profitable drugs, which accounted for more than 60% of sales, were set to lapse.

Lilly’s executives were begging investors to not jump ship after the company had announced the loss of over 5,000 jobs. The company chopped 13% of its workforce.

But, that’s history because today the company is thriving. In the past decade, the company has launched 20 drugs that treat diseases from arthritis to cancer.

In the past few months, Lilly has acquired every one of their competitors, securing them as the the most valuable drugmaker in the world. Lilly is now worth $518 billion, as measured by their market value. Market value is figured by the prices of its stock times the number of outstanding shares.

The drug company with the second highest market value, $450 billion, is Johnson & Johnson, a New Jersey-based company.

Earlier this month, Lilly reported second-quarter earnings that decimated Wall Street expectations by large margins. Included in the earnings were the sales of roughly $1 billion from their new drugs for diabetes and weight loss, Mounjaro.

The positive earnings has skyrockets Lilly shares to an all-time high that day, rising 18% to $535.59, becoming one of the best on Wall Street. The shares rose consistently through the week, closing at $546.62.

Investors can now see Lilly as a company that is more stable and significantly less risky.

But what does this mean for Indianapolis? It means that one of the city’s oldest and largest employers are not longer at risk of being bought out and uprooted, causing the loss of thousands of Hoosier jobs. Worldwide, Lilly employs 36,000, nearly a third are Hoosiers.

Much of the noise of Lilly comes from the high expectations for Mounjaro. The drug hit the market in June 2022, originally marketed as a treatment for Type 2 diabetes. Within the first six months of this year, Mounjaro has made $1.55 billion.

The drug is flying off the shelves, even quicker than before once the weight loss claims were substantiated. Because of the popularity of the drug, Mounjaro is selling quicker than Lilly can produce it, causing delays and shortages. Federal regulators are expected to approve it to treat obesity this year. Some doctors have already started prescribing the drug off-label for weight loss.

Medical analysts expect Mounjaro to bring in tens of billions of dollars per year as demand has only increased for weight loss treatments. Statistics show more than 40% of American adults are categorized as “obese.”

Currently, Lilly’s best selling drug is Trulicity. Trulicity is a diabetes and cardiovascular medicine that hit $7.4 billion in sales last year.

Lilly is awaiting the green light from the USDA for another drug that has the potential to be a huge hit. The drug is an experimental Alzheimer’s medicine that has shown to slow Alzheimer’s deterioration by four to seven months.

The drug company has been investing in modern manufacturing an research facilities. The company announced, last April, the investment of an additional $1.6 billion in a new drug manufacturing hub in Boone County. Originally, the company invested $2.1 billion. Altogether, Lilly contributed $3.7 billion to the manufacturing hub. It is expected that the expansion of the hub will create 200 jobs.

The significant expansion is to hopefully help with the growing demand of pharmaceutical products over the next decade. Lilly has a few drugs waiting to be launched, including drugs for Alzheimer’s disease, chronic kidney disease and dermatitis. Currently, Lilly has over a dozen other drugs in the development stage.

Lilly’s triumphs are making shareholders money. The stock value has increased in value over 1,000% in the past decade.

Lilly Endowment, the company’s largest shareholder, is one of the biggest charity foundations in the county. The Lilly family set the endowment up in 1937 when they would gift stocks.

In the past decade, the endowment’s assets, which are mostly comprised of Lilly stock, has matured from $7.7 billion in 2013 to $40.8 billion by the end of 2022.

Under federal law, private foundations are required to make charitable donations that are equal to or more than 5% of their assets during any given year. Since April, the endowment has sold about 1.8 million shares of Lilly stock. The company still had control of 101 million shares of Lilly stock at the end of last month, which is about 10.6% of the company’s outstanding shares.

Lilly’s foundation makes grants to arts, education, religious and community development organizations in Indiana and neighboring areas. Last year, the foundation paid our $1.3 billion in grants and has approved another $1.3 billion in new grants.

Since the foundation was founded, the endowment has granted donations to 10,722 charitable organizations, most of which are based in Indiana.

Financial analysts are not expecting Lilly stock to linger in the $500 range forever. However, analysts do think the company is going to see several more years of growth. The company has very little debt and a reported $4 billion in free cash flow to back impending acquisitions and investments.