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Shares of Eli Lilly (NYSE: LLY) are up by a shocking 309% over the last three years, and, as smart investors know, a lot of that gain is attributable to just two words. Both of those words are the names of the company’s rising-star medicines.

And the projections for the future growth prompted by both of those medicines are likely to shock even the optimists. Here’s why they make this stock worth a buy.

The latest-earnings update has a lot to like

Lilly’s revenue rose by 26% year over year in the first quarter, reaching more than $8.7 billion. The growth was driven by the two words that every investor in this stock should know by now: Mounjaro and Zepbound.

Mounjaro brought in $1.8 billion in Q1, up by a whopping 568% compared to a year prior, whereas Zepbound’s sales of $517 million are rising quarter over quarter, but it hasn’t been approved for a full year yet. The two products are delivered as injections, and they’re the same molecule, which is called tirzepatide, but Mounjaro is indicated to treat type 2 diabetes, whereas Zepbound is indicated to treat obesity.

In the U.S., Zepbound captured 57% of the new prescriptions for anti-obesity medicines in the four weeks leading up to the end of Q1, and management estimates that it has a market share approaching 40%. Mounjaro holds 24% of the injectable-incretins segment of the anti-diabetes drugs market, and its share of new prescriptions in the same period was 30%.

To put those market shares into context, consider that the company hasn’t been able to produce enough tirzepatide in either formulation to meet demand for months now. Analysts at J.P. Morgan estimate that the market for such medicines could reach a size of $71 billion by 2032.

In short, Eli Lilly’s future is looking very bright right about now.

When will the party end?

Eli Lilly just announced that it acquired an injectable-medicine manufacturing facility that’s slated to open toward the end of 2025. More capital expenditures in manufacturing are likely on the way even as it recently started the construction of a facility worth $2.5 billion in Germany. The takeaway here is that management is predicting that it will take years to fully serve demand for its leading metabolic medicines like the ones discussed above.

With that in mind, it is hard to argue against buying this stock, as its positioning in the obesity drugs market will likely only improve with time. Even if the market will eventually find the bottom of demand, it almost certainly won’t be any time this decade. Beyond that, the company will have had plenty more time to develop the next-gen medicines that will render the existing set as obsolete — or at least not the first choice for patients getting onboarded with new prescriptions.

Lilly currently has three obesity programs in phase 2 or phase 3 clinical trials that are based on molecules other than tirzepatide. It will have ample opportunity to combine its older medicines with these new contenders, which could result in an even better therapy product down the line.

Or it could buy up other assets to commercialize as monotherapies or in combinations, which management has been keen to do so far, like when it paid $1.9 billion to acquire Versanis in mid-2023 to gain ownership of its phase 2 program.

In closing, now is a great time to add to or start a position in Lilly. In a few years, the picture could change, but for now, it looks like it’ll be one of the best-performing pharmaceutical stocks for quite some time, and there’s little to threaten its growth.

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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