Analyst Explains Why Eli Lilly (LLY) GLP-1 Advantage is Decreasing

We recently published 10 Stocks to Watch Ahead of Q3 Earnings Season. Eli Lilly and Company (NYSE:LLY) is one of the stocks that Wall Street analysts are discussing these days.

Don Kaufman of TheoTrade said in a recent program on Schwab Network that Eli Lilly And Co (NYSE:LLY) edge in the GLP-1 drugs is thinning as “every” pharma company has the capacity to make drugs like GLP-1 treatments.

“You know, one of the things I think people have to recognize about GLP1 and some of the drugs in the pipeline right now is that they are not all that complex. When you look at the marketplace for these drugs, they are being copied left and right. Every pharmaceutical company out there has the capacity to make something like GLP1, and they are doing exactly that. It is incredibly difficult to actually protect patents these days. I would look at Eli Lilly And Co (NYSE:LLY) and say that this is exactly why GLP1’s initial success is leading to sellside activity—because everybody is getting a piece of it.”

PGIM Jennison Health Sciences Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its second quarter 2025 investor letter:

“Eli Lilly and Company (NYSE:LLY) is a diversified biopharmaceutical company with core franchises in Diabetes, Obesity, Immunology, Neurodegeneration, and Oncology. The Company is one of the two global leaders in diabetes with tirzepatide now the strongest ever launch in diabetes and obesity under the Mounjaro and Zepbound brand names. LLY also has exciting franchises in neurology, immunology, and oncology that are starting to add meaningfully to growth. With a proven history of strong commercial execution and one of the highest Research and Development (R&D) success rates in the industry, we see opportunity for continued success. With a lack of meaningful patent expirations for the rest of the decade, LLY is uniquely positioned amongst its larger-cap peers. Eli Lilly’s recent quarter was largely as expected, with a minor U.S. Mounjaro sales miss offset by strong Zepbound performance and robust international Mounjaro growth, resulting in an overall small beat for the tirzepatide franchise. Prescription trends are increasingly predictive of Lilly’s results, which should reduce the quarter-to-quarter volatility seen last year. The company did not raise guidance, reflecting caution after prior guidance missteps and ongoing uncertainties this year, but quarterly margins and Earnings Per Share (EPS) exceeded expectations and a modest reduction in full year EPS guidance was purely driven by the accounting treatment of acquired in-process R&D (acquisitions of small pipeline-stage biotechs). Lilly also maintained its year-end 2024 foreign exchange assumptions in guidance, not factoring in any benefit from recent dollar weakness, setting them up for a guidance raise at midyear on both these fundamental and technical points. May stock weakness was an overreaction to the announcement of a closed formulary favoring Wegovy for a small part of CVS Caremark’s book of Pharmacy Benefit Management (PBM) business, triggering investor fears of a price war in GLP-1s. It is now clear that fear was misplaced, CVS is truly a one-off, and with continued strong growth in volumes, we expect LLY to continue recovering from this sell-off.”

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Disclosure: None. This article is originally published at Insider Monkey.