Eli Lilly's Strategic Momentum in Oncology and Diabetes/Obesity Markets

The pharmaceutical industry is at a pivotal juncture, with oncology and diabetes/obesity emerging as two of the most lucrative and strategically critical therapeutic areas. For Eli Lilly, the past year has been defined by a dual focus: solidifying its leadership in the GLP-1 revolution while navigating the complexities of oncology innovation. As the company prepares to submit its oral obesity drug orforglipron for FDA approval by year-end 2025, the question looms: Can Lilly sustain its momentum in these high-growth markets amid intensifying competition and regulatory headwinds?

Diabetes/Obesity: A GLP-1 Dominance Under Pressure

Eli Lilly’s dominance in the diabetes/obesity space has been underpinned by the blockbuster success of Mounjaro (tirzepatide) and Zepbound. In Q2 2025, the Cardiometabolic Health segment generated $9.2 billion in revenue, with Mounjaro and Zepbound accounting for 58% of the company’s total sales [1]. These drugs have outperformed Novo Nordisk’s semaglutide-based offerings, such as Wegovy and Ozempic, in clinical trials, with Zepbound demonstrating superior weight loss and waist circumference reduction in the SURMOUNT-5 trial [5].

However, the path forward is not without turbulence. The recent Phase 3 ATTAIN-1 and ATTAIN-2 trials for orforglipron—a next-generation oral GLP-1 receptor agonist—revealed mixed results. While the drug achieved an average 11% weight loss in patients with diabetes and obesity over 72 weeks, its efficacy in obesity-only trials fell short of Wall Street expectations, triggering a 14% selloff in Lilly’s shares [3]. Analysts from Truist and William Blair have cautioned that higher discontinuation rates compared to Wegovy could erode market share, even as the oral formulation offers a compelling alternative to injectables [5].

Despite these challenges, Lilly’s pipeline remains robust. The company’s acquisition of SiteOne Therapeutics and partnerships with telehealth providers have bolstered its commercial infrastructure, ensuring broader access to its obesity therapies [4]. Moreover, orforglipron’s potential to expand the market by appealing to pill-preferring patients positions it as a key differentiator in a sector projected to grow from $50 billion in 2024 to $200 billion by 2031 [4].

Oncology: Innovation Amid Competitive Pressures

In oncology, Eli Lilly’s strategic bets are paying off, albeit with caveats. Verzenio, its CDK4/6 inhibitor for breast cancer, remains a cornerstone, generating $1.6 billion in Q2 2025 revenue and driving 11% year-over-year growth in the oncology segment [2]. However, the drug faces softness due to wholesaler buying patterns and competition from newer agents. To counter this, Lilly is advancing Muvalaplin—a Lp(a)-lowering therapy—into Phase III trials, signaling its intent to diversify beyond traditional oncology into cardiovascular disease [1].

The company’s 2025 American Society of Clinical Oncology (ASCO) presentations underscore its commitment to innovation. Key data from the EMBER-3 trial for imlunestrant in ER+/HER2- advanced breast cancer and updates on olomorasib, a KRAS G12C inhibitor, highlight Lilly’s pivot toward precision medicine and targeted therapies [3]. These efforts align with industry trends, as Iqvia forecasts oncology drug spending to reach $440 billion by 2028, driven by earlier-stage checkpoint inhibitor use and next-generation biologics [4].

Yet, the oncology landscape is fraught with challenges. Declining sales of older agents like Alimta and Cyramza due to immuno-oncology competition underscore the need for continuous pipeline replenishment. Lilly’s acquisition of Scorpion Therapeutics for a PI3Kα inhibitor in breast cancer and its collaboration with AdvanCell in radiopharmaceuticals reflect a proactive approach to addressing unmet needs [1].

Leadership Positioning and Financial Resilience

Lilly’s financials reinforce its leadership position. Q2 2025 revenue surged 38% to $15.56 billion, driven by volume growth in its incretin portfolio and a 36.83% year-over-year revenue increase for Mounjaro [3]. The company has raised its 2025 revenue guidance to $60–$62 billion, reflecting confidence in its ability to navigate patent expirations and regulatory costs [4].

Goldman Sachs’ recent “Buy” rating underscores Lilly’s strong moat, citing its commercial infrastructure and R&D pipeline as key advantages [2]. However, the firm warns that Novo Nordisk and emerging competitors like Viking Therapeutics are developing oral alternatives (e.g., amycretin, VK2735) that could pressure profit margins [5].

Conclusion: A Balancing Act

Eli Lilly’s strategic momentum in oncology and diabetes/obesity is a testament to its R&D prowess and commercial agility. While challenges—such as orforglipron’s suboptimal obesity-only results and oncology patent cliffs—loom, the company’s diversified pipeline, robust financials, and first-mover advantages in GLP-1 therapies position it to maintain leadership. The coming months will test its ability to execute on FDA submissions and defend its market share against rivals. For investors, the key will be monitoring how Lilly navigates these crosscurrents while staying ahead of the innovation curve.

Source:
[1] Eli Lilly's SWOT analysis: stock's growth potential in obesity market faces challenges [https://www.investing.com/news/swot-analysis/eli-lillys-swot-analysis-stocks-growth-potential-in-obesity-market-faces-challenges-93CH-4218304]
[2] Goldman Sachs Remains Positive as Eli Lilly (LLY) Expands [https://finance.yahoo.com/news/goldman-sachs-remains-positive-eli-035352264.html]
[3] Lilly shares fall as obesity pill misses expectations in key trial [https://www.biopharmadive.com/news/eli-lilly-orforglipron-obesity-data-q2-2025-earnings/757049/]
[4] Biopharma Industry in 2025: Growth Drivers, AI Innovation ... [https://www.morningstar.com/stocks/2025-biopharma-industry-outlook-growth-innovation-emerging-risks]
[5] 5 Oral Obesity Drugs Challenging Lilly's Orforglipron [https://www.biospace.com/drug-development/5-oral-obesity-drugs-challenging-lillys-orforglipron]