How Does Eli Lilly Make its Money?
Eli Lilly is a global pharmaceutical company that discovers, develops, manufactures, and sells prescription drugs. The company has become the world’s most valuable pharma company thanks to its blockbuster GLP-1 drugs: Mounjaro (tirzepatide for Type 2 diabetes) and Zepbound (tirzepatide for obesity/weight loss). These two drugs have made Eli Lilly the center of the weight-loss drug revolution alongside Novo Nordisk (Ozempic/Wegovy).
Revenue Breakdown
| Product/Category | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Mounjaro (diabetes) | $11.6B | $5.2B | +123.1% |
| Zepbound (obesity) | $4.9B | $0.2B | +2,350% |
| Verzenio (breast cancer) | $4.4B | $3.5B | +25.7% |
| Humalog/Humulin (insulin) | $2.3B | $2.5B | -8.0% |
| Taltz (psoriasis/PsA) | $2.9B | $2.8B | +3.6% |
| Jardiance (diabetes) | $2.8B | $2.7B | +3.7% |
| Olumiant (rheumatoid arthritis) | $0.9B | $1.0B | -10.0% |
| Other Products | $5.4B | $5.1B | +5.9% |
| Total Revenue | $45.0B | $34.1B | +32.0% |
Mounjaro + Zepbound — 37% of Revenue
The twin blockbusters. Both contain tirzepatide, a dual GIP/GLP-1 receptor agonist:
- Mounjaro: FDA-approved for Type 2 diabetes. $11.6B in its second full year — one of the fastest ramp-ups in pharma history.
- Zepbound: FDA-approved for obesity (November 2023). Already at $4.9B in its first full year. Demand consistently exceeds supply.
Combined, tirzepatide generated $16.5B in 2024 and is projected to reach $25B+ by 2026.
Oncology — Verzenio
Verzenio (abemaciclib) for breast cancer grew 26% to $4.4B, making it the #1 CDK4/6 inhibitor globally. Supported by expanded indications including adjuvant (early-stage) breast cancer.
Diabetes Legacy
Humalog and Humulin (insulin) are declining as Lilly cut insulin prices 70% in 2023 to address affordability concerns. Jardiance (licensed from Boehringer Ingelheim) remains steady.
Income Statement Overview
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $45.0B | $34.1B |
| Cost of Revenue | $11.7B | $10.3B |
| R&D Expense | $11.5B | $9.3B |
| Operating Income | $12.9B | $6.5B |
| Net Income | $10.6B | $5.2B |
Key Financial Metrics
- Gross Margin: 74.0% — Premium pharma margins. Biologics like Mounjaro have high manufacturing costs relative to small molecules but still generate exceptional margins.
- R&D Spending: $11.5B (25.6% of revenue) — Massive investment pipeline spanning Alzheimer’s (donanemab), obesity combinations, and oncology.
- Operating Margin: 28.7% — Expanding rapidly as Mounjaro/Zepbound scale. Fixed R&D and manufacturing costs divide across a much larger revenue base.
- Revenue Growth: +32% — Exceptional growth for a large-cap pharma company, entirely driven by the GLP-1 franchise.
What to Watch
- Mounjaro/Zepbound supply — Demand vastly exceeds supply. Eli Lilly is investing $18B+ in manufacturing capacity. Resolving supply constraints is the #1 near-term catalyst.
- Obesity market expansion — The global obesity drug market could reach $100B+ by 2030. Zepbound competes with Novo Nordisk’s Wegovy and next-gen oral GLP-1 drugs in development.
- Tirzepatide in additional indications — Trials underway for heart failure, sleep apnea, NASH/MASH (fatty liver), and kidney disease. Each new indication expands the addressable market.
- Donanemab (Alzheimer’s) — FDA approved (brand: Kisunla). The Alzheimer’s disease market could be worth $10B+ but adoption has been slow due to monitoring requirements and modest efficacy.
- Patent cliff management — Mounjaro’s patents extend into the 2030s, providing a long runway. But pharma companies always face patent cliff risk on their blockbusters.