Eli Lilly will be the first trillion-dollar drug company in history, billionaire investor Ken Langone says
REUTERS/Mike Segar
- Ken Langone thinks Eli Lilly will be the first trillion-dollar drug company in history, he said on CNBC.
- The company is currently worth over $500 billion and is the biggest healthcare stock in the world.
- Lilly's successful management turnovers and strong R&D spending is what has kept the company strong.
Ken Langone sees the stars aligning for Eli Lilly stock.
"I think Lilly will be the first trillion-dollar drug company in history," the billionaire investor said in a CNBC interview on Wednesday. "Why? Their pipeline. And god bless [former CEO] John Lechleiter. In the dark years when everything was falling off the cliff, he was firm in his commitment to spending the money on R&D and protecting the dividend."
This year, Eli Lilly rode the GLP-1 drug train with Mounjaro and Zepbound, with shares soaring 62% since January.
In May, it surpassed Johnson & Johnson to become the biggest pharmaceutical company by market cap. Lilly is now worth about $568 billion.
According to Langone, who also cofounded Home Depot, Lilly's bright future has a lot to do with its previous leadership under Lechleiter.
"He simply said we're not cutting back on R&D but we're going to focus, and we're going to make sure that we get more bang for the buck than possible," Langone said. "And they did it."
But while Lilly and Novo Nordisk, which has also soared on GLP-1 drugs like Ozempic, have had banner years, other drug stocks have largely struggled.
Take Pfizer, which has seen its stock sink nearly 50% year to date. Shares fell Wednesday after it forecast sales that could be up to $5 billion below Wall Street's 2024 views as revenue from COVID-19 vaccine and treatments continues to slow.
"I feel bad for Pfizer," Langone said.
To be sure, Langone has been a long-time Lilly stockholder and said Wednesday it was his top pick all the way back in 2015.
"Going back 46 years I've owned it, counting the dividends, [the stock] has compounded 14.8% a year," he said.
from Business Insider https://ift.tt/afD9Up3
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