Eli Lilly Becomes World’s Largest Healthcare Firm
Eli Lilly & Co has taken the top spot as the world’s largest healthcare company based on market capitalization, surpassing the behemoth UnitedHealth Group Inc. The pharmaceutical company saw a 0.9% uptick on Wednesday, maintaining its steady growth after a consecutive four-month rise and increasing its overall worth by over $94 billion this year. The end of June saw Eli Lilly at an all-time peak.
The remarkable ascent of Eli Lilly can be attributed to its promising range of treatments for obesity, spearheaded by the diabetes drug, Mounjaro, as well as its innovative Alzheimer’s disease treatment under development. These factors have positioned Eli Lilly as the best-performing stock in the S&P 500 Pharmaceuticals Index for the year. Notably, this marks the first occasion in over ten years where Eli Lilly has surpassed UnitedHealth in terms of market value.
Meanwhile, UnitedHealth saw a decline of 1.4% and has experienced an overall 11% drop this year. BMO Capital Markets analyst, Evan Seigerman, suggested that Eli Lilly’s triumph in the obesity treatment domain and, to a lesser degree, its Alzheimer’s breakthroughs, are the primary drivers of this shift. “They not only have the drugs, they also
have the capability to effectively commercialize and roll them out,” he noted.This achievement arrives less than two months following Eli Lilly’s overtaking of Johnson & Johnson as the largest pharmaceutical company worldwide. Carter Gould, a Barclays analyst, states this demonstrates the “magnitude of the obesity opportunity” and Eli Lilly’s leading role in the sector.
In late April, Eli Lilly revealed its diabetes medication, Mounjaro, had achieved success in a second final-stage obesity trial, setting it up as a competitor to Novo Nordisk A/S’s Wegovy, a leader in the new class of weight-loss drugs. In addition, Eli Lilly plans to seek approval for its Alzheimer’s drug, donanemab, following a late-stage trial demonstrating its potential to modify the course of the most prevalent type of dementia. It will face competition from Eisai Co’s drug, Leqembi.
UnitedHealth is currently down 15% from its record high in late October. Health insurers have faced challenges due to potential alterations to Medicare and Medicaid, along with increasing regulatory attention from Washington towards pharmacy-benefit managers.
Adding to these issues, last month UnitedHealth CFO John Rex signaled that a resurgence in elective surgeries and other medical care could lead to higher-than-anticipated expenses, which resulted in the company’s shares dropping to their lowest point in a year.
