Baron Fifth Avenue Growth Fund on Eli Lilly and Company
Thesis
The Fund added to Eli Lilly because it views the company as a compelling large-scale opportunity in the still-underpenetrated GLP-1 market. It expects GLP-1 drugs to become standard of care and believes the category can exceed $180 billion as awareness, insurance coverage, and evidence across additional medical conditions expand. Lilly is viewed as the clear leader, with Zepbound and Mounjaro, the oral candidate Orforglipron, and a strong next-generation obesity pipeline led by Retatrutide and Eloralintide. The thesis also includes significant optionality beyond obesity through additional indications and a diversified pharmaceutical pipeline spanning Alzheimer's disease, breast cancer, cardiology, and sleep disorders. The Fund believes this pipeline and Lilly's substantial cash generation can support long-term growth well beyond the current GLP-1 franchise.
“We added to Eli Lilly & Company in the second quarter as we believe it remains a compelling big idea.”
Key risks
- Continued adoption of GLP-1 therapies depends partly on greater insurance coverage and continued evidence of benefits across additional conditions.
- A meaningful portion of the long-term opportunity depends on successful clinical development and commercialization of pipeline assets.