GLP-1 Stocks: The Next Wave of Growth After Eli Lilly's Surge

Eli Lilly's stock has soared nearly 480% over five years, driven by its dominance in the GLP-1 drug market. The company's diabetes and weight-loss therapies, like Mounjaro and Zepbound, have transformed investor sentiment around this class of medications. But as demand for obesity and diabetes treatments surges globally, the story of GLP-1 stocks is far from over. Undervalued players with promising pipelines and upcoming regulatory milestones could be the next beneficiaries of this multi-billion-dollar trend.

The Catalyst: Eli Lilly's Explosive Growth

Eli Lilly's stock (NYSE: LLY) rose from around $160 in 2020 to over $900 by mid-2025, fueled by blockbuster sales of its GLP-1 drugs. In Q1 2025 alone, Mounjaro and Zepbound generated $6.1 billion in combined sales, a 113% and 347% year-over-year jump, respectively. Analysts attribute this to their clinical superiority—Zepbound's 20.2% average weight-loss in trials outperformed Novo Nordisk's Wegovy (13.7%).

The $1.3 billion acquisition of Verve Therapeutics in June 蕹25 underscores investor confidence in GLP-1's potential. Verve's gene-editing platform could extend the market's reach into cardiovascular diseases, a $40 billion addressable market by 2030 (per EvaluatePharma).

Why GLP-1 Demand Isn't Slowing

The global obesity and diabetes crisis ensures sustained demand. Over 40% of American adults are obese, and type 2 diabetes affects 1 in 10 people worldwide. GLP-1 drugs, which mimic gut hormones to regulate appetite and blood sugar, are now frontline treatments.

Dr. Sarah Green, a clinical endocrinologist, notes: “GLP-1s are game-changers because they address root causes—insulin resistance and metabolic dysfunction—rather than just managing symptoms.”

Undervalued Players to Watch

While Eli Lilly and Novo Nordisk (NYSE: NVO) dominate the market, smaller firms with innovative pipelines are primed to capitalize:

1. Viking Therapeutics (NASDAQ: VKTX)
2. Pipeline: VK2735, an oral GLP-1 agonist, showed 14.7% weight loss in Phase 2 trials, outperforming Eli Lilly's Zepbound.
3. Valuation: Viking's market cap is just $500 million, despite its $1.2 billion potential peak sales (Jefferies estimate).

4. Risk: High R&D costs and dilution from recent equity raises.

5. Altimmune (NASDAQ: ALT)

6. Pipeline: Pemvidutide, a once-weekly injectable, delivered 15.6% weight loss in Phase 2, rivaling Mounjaro.
7. Valuation: At $150 million, it's a speculative bet, but a positive Phase 3 readout in 2026 could trigger a re-rating.

8. Risk: Limited resources compared to big pharma.

9. Lexicon Pharmaceuticals (NASDAQ: LXRX)

10. Pipeline: Zynquista, a GLP-1/glucagon dual agonist, is in Phase 3 for type 2 diabetes. Its novel mechanism could offer better efficacy than existing drugs.
11. Valuation: At $800 million, it's undervalued relative to its $2 billion sales potential (BMO Capital).

Key Metrics to Track

Investment Strategy

• Core Position: Hold Eli Lilly for its 45% revenue growth and retatrutide (a triple-agonist in Phase 3), which could solidify its leadership.
• Growth Plays: Buy Viking or Altimmune on dips, but set strict stop-losses due to execution risks.
• Avoid: Novo Nordisk, which trades at a P/E of 20 vs. LLY's 62, suggests limited upside unless it innovates beyond its current portfolio.

Backtest the performance of GLP-1 drug developers (VKTX, ALT, LXRX) when 'buy condition' is 60 days before Phase 3 readouts and 'hold until' 20 trading days post-results, from 2020 to 2025.

The Risks

• Regulatory Hurdles: New drugs must prove safety over long-term use. For example, Viking's VK2735 faced concerns about liver enzyme elevations in trials.
• Competition: Eli's oral drug orforglipron (Phase 3 complete) threatens smaller players by offering a non-invasive alternative.

Conclusion: GLP-1's Next Chapter

The GLP-1 market is still in its infancy, with oral formulations and combination therapies unlocking new applications. Investors should prioritize companies with scalable manufacturing, differentiated pipelines, and 2025–2026 regulatory catalysts.

Actionable Picks:
1. LLY (Hold for dividends and R&D upside).
2. VKTX (Buy below $3/share for VK2735's potential).
3. LXRX (Watch for Zynquista's Phase 3 data in H2 2025).

The race to conquer metabolic diseases is wide open. GLP-1 stocks offer a rare combination of science, scalability, and human need—making them a buy for the long haul.