We had the opportunity to attend a Morgan Stanley–hosted meeting with Lilly management. We came away more confident that the company can both lead and broaden the global obesity market. Management’s message centered on three pillars: a very large addressable market, a portfolio designed to segment that market (injectables and a true oral), and the manufacturing and access muscle to scale globally. For our purposes, the key is not a single hero product, but Lilly’s ability to meet different patient needs—by route of administration, efficacy, and geography—while keeping pricing disciplined rather than defensive.

The TAM (total addressable market) remains enormous, with management and investors continuing to anchor on roughly one billion people globally with obesity. Lilly’s portfolio is built to cover that heterogeneity: Tirzepatide as the core injectable, an oral GLP‑1 (Orforglipron) aimed at mass‑market, first‑line use, and a next‑generation high‑efficacy injectable program. The strategic intent is straightforward—use breadth to serve more patients, more settings, and more payers, rather than relying on a single mechanism.

Pricing was a consistent theme, and we view Lilly’s posture as a glide path, not a cliff. Internally they are budgeting ~5–9% annual price erosion across the portfolio, assuming disciplined competition and preserving premium pricing where the value proposition supports it (explicit examples included the UK and Germany). The LLY management team addressed two common worries directly: Canadian cross‑border diversion and generic Semaglutide noise—neither is viewed as a material near‑term risk. Channel color (including the CVS/Wegovy contract on the competitor side) suggests a rational environment, but we will keep an eye on U.S. policy levers (IRA negotiations) and any trade/tariff shifts that could influence list/realized price by market.

The oral opportunity is the near‑term swing factor. Orforglipron is positioned as a convenient, scalable pill (no food/water restrictions) with injectable‑like weight‑loss positioning, and a 5–10% discontinuation with a safety profile similar to injectable GLP‑1s. Management highlighted two lanes where the oral can outperform: regions with cold‑chain storage challenges and populations with needle phobia—both of which tend to skew ex‑US. Pair that with capacity investments and the result is a credible path to faster penetration outside the U.S., with the option to step patients up to injectables (e.g., Tirzepatide) when more aggressive weight loss is needed. We’ll be tracking upcoming Orforglipron readouts closely for safety/tolerability at scale.

Financially, Lilly continues to look like a growth company investing from a position of strength: gross margins in the low‑80s and a long‑term operating margin below 50% by choice, given the intent to keep funding the pipeline. Longer term, we also note optionality in Alzheimer’s prevention (earliest external read around 2026), which is not central to our obesity thesis but adds to the innovation runway. We like the future for Eli Lilly.