Lilly SWOT Analysis (2025)

In 2025, Lilly $LLY ( ▼ 0.21% ) (aka Eli Lilly), the pharmaceutical giant, has been making headline-grabbing moves with its blockbuster weight loss medications while simultaneously investing billions in domestic manufacturing and research partnerships.

Yet the company faces notable headwinds, from recent stock price declines to intensifying competition in the lucrative obesity drug market.

This analysis examines Lilly's strategic position for the remainder of 2025, looking at its strengths, weaknesses, opportunities, and threats in the pharmaceutical sector.

Table of Contents

• Strengths

  • Powerhouse GLP-1 Portfolio Driving Exceptional Gro …

  • Ambitious Manufacturing Expansion

  • Strategic Academic-Industry Partnership

  • Global Market Expansion

• Weaknesses

  • Stock Price Volatility Despite Strong Revenue Perf …

  • Downward Pricing Pressure

  • Declining Performance of Established Products

  • Adjusted Earnings Guidance

• Opportunities

  • Explosive Growth in Anti-Obesity Market

  • Pipeline Advancement and Indication Expansion

  • Manufacturing Reshoring Benefits

  • Technology-Driven Innovation

• Threats

  • Intensifying Competition in GLP-1 Market

  • Drug Pricing Reform Pressures

  • Supply Chain Vulnerabilities

  • Patent Cliffs and Market Dynamics

• Strategic Assessment and Outlook

  • Leveraging Strengths to Capture Market Opportunity

  • Mitigating Weaknesses Through Innovation

  • Capitalizing on Transformative Industry Trends

  • Risk Management in an Uncertain Environment

• Final Thoughts: Lilly's Position for the Remainder …

Strengths

Powerhouse GLP-1 Portfolio Driving Exceptional Growth

Lilly's incredible revenue trajectory is primarily fueled by two standout medications - Mounjaro (tirzepatide) for diabetes and Zepbound (tirzepatide) for weight management.

Q1 2025 financial results revealed a remarkable 45% year-over-year revenue increase, reaching $12.73 billion, with these two products leading the charge^12.

The company has maintained its ambitious 2025 revenue guidance of $58.0-$61.0 billion, representing a 32% growth rate compared to 2024^8.

Q1 2025 HIGHLIGHTS:
• Revenue: $12.73 billion (+45% YoY)
• EPS: $3.06 (+23% reported basis)
• Non-GAAP EPS: $3.34 (+29%)
• Key growth drivers: Mounjaro and Zepbound

The clinical superiority of Lilly's weight management offering was recently validated in head-to-head competition.

In May 2025, complete results from the SURMOUNT-5 trial published in The New England Journal of Medicine demonstrated Zepbound's superior efficacy compared to Novo Nordisk's Wegovy, with participants achieving average weight loss of 20.2% with Zepbound versus 13.7% with Wegovy^15.

This clinical advantage strengthens Lilly's competitive position in the explosive weight management market.

Ambitious Manufacturing Expansion

In February 2025, Lilly announced plans to build four new pharmaceutical manufacturing sites in the United States, representing a bold move to shore up domestic production capabilities^14,^17.

Three facilities will focus on manufacturing active pharmaceutical ingredients (APIs) and reshoring critical small-molecule chemical synthesis capabilities, while the fourth will extend the company's parenteral (injectable) manufacturing network^19.

This manufacturing initiative represents part of more than $50 billion in U.S. capital expansion commitments since 2020^17.

Beyond addressing supply chain vulnerabilities, this investment positions Lilly to meet rapidly growing demand for its injectable GLP-1 products while creating approximately 3,000 skilled positions and 10,000 construction jobs^17,^21.

Strategic Academic-Industry Partnership

On May 9, 2025, Lilly announced a significant expansion of its collaboration with Purdue University, committing up to $250 million over eight years in what could potentially become the largest industry-academic agreement of its kind in the United States^10.

The Lilly-Purdue 360 Initiative aims to accelerate pharmaceutical innovation across the entire pipeline, from discovery to manufacturing.

This partnership demonstrates Lilly's commitment to long-term innovation and its ability to forge strategic alliances that strengthen its research capabilities.

The focus on AI-powered tools, technology-enabled approaches to accelerate clinical development, and advanced manufacturing technologies aligns perfectly with broader industry trends toward digital transformation^10.

Global Market Expansion

Lilly continues to execute an aggressive international expansion strategy for its key GLP-1 products.

Mounjaro was recently launched in China, with commercial scale-up planned for the second half of 2025 as supply stabilizes^2.

Additional recent launches in India and Mexico, with more country introductions planned throughout 2025, position Lilly to capitalize on global demand for effective diabetes and obesity treatments.

Weaknesses

Stock Price Volatility Despite Strong Revenue Performance

Despite impressive revenue growth and promising clinical data, Lilly's stock has experienced significant volatility in 2025.

The company's shares have declined approximately 17% throughout May, including an 11% drop immediately following the Q1 earnings release on May 1.

This disconnect between financial performance and market valuation suggests investor concerns about sustainability, competition, or potential regulatory headwinds.

Downward Pricing Pressure

Lilly faces persistent downward pricing pressure in the U.S. market, where prices of most products, including Mounjaro and Zepbound, have been decreasing primarily due to revised estimates for rebates and discounts.

This trend has been ongoing since 2021, and for 2025, Lilly anticipates a mid-to-single-digit price decline.

These pricing challenges could constrain margin growth despite strong volume increases.

Declining Performance of Established Products

While Mounjaro and Zepbound continue their impressive ascent, Lilly's established portfolio shows signs of weakness.

Trulicity, once a cornerstone product, is experiencing declining sales in the U.S. due to competitive pressures, including switches to Mounjaro and persistent supply issues.

Additionally, Verzenio did not meet sales expectations in Q1 2025^2. This underperformance in mature product lines increases pressure on newer medications to sustain overall growth.

Adjusted Earnings Guidance

Though Lilly maintained its sales guidance for 2025, the company has lowered its earnings expectations to account for charges related to the acquisition of the PI3Kα inhibitor program from Scorpion Therapeutics.

This adjustment signals potential pressure on profitability despite strong top-line growth. Earnings estimates for Lilly in 2025 have dropped from $23.49 to $22.21 per share within the past month.

FINANCIAL OUTLOOK ADJUSTMENT:
• 2025 Revenue guidance maintained: $58.0-$61.0 billion
• EPS guidance lowered to reflect acquisition charges
• Earnings estimates decreased from $23.49 to $22.21
• Price erosion expected: mid-to-single-digit decline

Opportunities

Explosive Growth in Anti-Obesity Market

The global anti-obesity drugs market represents one of the most significant opportunities in pharmaceutical history.

Current estimates project market growth from $12.8 billion in 2025 to $104.9 billion by 2035, reflecting a compound annual growth rate of 21.1%^6.

With Zepbound demonstrating superior weight loss efficacy compared to its main competitor, Lilly is well-positioned to capture substantial market share in this rapidly expanding segment.

Pipeline Advancement and Indication Expansion

Lilly's pipeline progress continues at a remarkable pace, particularly in the obesity and diabetes space.

The company recently reported positive Phase 3 trial results for orforglipron, its small molecule oral GLP-1 agonist, in Type 2 diabetes^12.

This represents a significant advancement as patients strongly prefer oral alternatives to injectable medications.

Beyond new molecules, Lilly is strategically expanding indications for existing products.

In December 2024, the FDA approved Zepbound's second indication for obstructive sleep apnea in adults with obesity.

Additionally, Lilly has submitted filings for tirzepatide (the active ingredient in both Mounjaro and Zepbound) for use in heart failure and expects to release outcome study data later in 2025.

These indication expansions represent significant growth opportunities with relatively lower development costs than entirely new medications.

Manufacturing Reshoring Benefits

Lilly's substantial investment in domestic manufacturing aligns with the current political climate favoring U.S. production.

With President Trump's administration emphasizing reshoring and signaling potential pharmaceutical import tariffs, Lilly's manufacturing expansion positions the company favorably.

Commerce Secretary Howard Lutnick's presence at Lilly's manufacturing announcement underscores the political advantages of this strategy^21.

While competitors may face supply chain disruptions or tariff impacts, Lilly's domestic manufacturing initiative creates both political goodwill and operational resilience.

Technology-Driven Innovation

The pharmaceutical industry is undergoing rapid technological transformation, with artificial intelligence expected to drive 30% of new drug discoveries by 2025^18.

Lilly's expanded partnership with Purdue University specifically emphasizes "applying AI-powered tools to augment traditional drug discovery methods while leveraging advancements in machine learning and big data analytics".

This focus on technology-enabled approaches extends beyond discovery to accelerating clinical development and incorporating robotics and AI into manufacturing processes.

Lilly's proactive embrace of these trends positions the company to realize efficiency gains across its entire value chain.

Threats

Intensifying Competition in GLP-1 Market

The GLP-1/obesity market that drives Lilly's growth is becoming increasingly competitive.

In May 2025, CVS Caremark, a prominent pharmacy benefit manager (PBM), announced a partnership with Novo Nordisk to designate their competing product Wegovy as the preferred GLP-1 for weight management starting July 1, 2025.

Additionally, Novo Nordisk has formed partnerships with telehealth companies to provide Wegovy at reduced prices for patients paying out-of-pocket.

While Lilly's CEO Dave Ricks has expressed confidence that the CVS decision won't significantly affect revenues, this development highlights the competitive intensity in formulary placement and market access.

Additional manufacturers are also developing GLP-1 products, potentially further intensifying competition in coming years.

Drug Pricing Reform Pressures

The pharmaceutical industry continues to face significant political pressure regarding drug pricing.

The Trump administration has emphasized controlling drug costs, with political rhetoric specifically targeting high-priced medications^2.

While pharmaceuticals have thus far been exempt from tariffs, they may become targets in future rounds as the administration aims to bring production back to the U.S..

Additionally, the implementation of Medicare negotiation under the Inflation Reduction Act represents an ongoing threat to pricing power, with the first negotiated prices becoming effective January 2026^20.

For a company like Lilly with several blockbuster medications, these pricing reform initiatives could significantly impact revenue and profitability.

Supply Chain Vulnerabilities

Despite Lilly's manufacturing expansion plans, supply chain challenges persist across the pharmaceutical industry.

Global disruptions revealed during the COVID-19 pandemic continue to affect the production and distribution of medications.

For Lilly specifically, supply issues have already impacted sales of Trulicity.

As demand for GLP-1 products continues to surge, ensuring adequate supply remains a critical challenge.

INDUSTRY CHALLENGES IMPACTING LILLY:
• Regulatory compliance complexities
• Global talent shortages in STEM and digital roles
• Supply chain vulnerabilities
• Integration challenges with advanced technologies
• Healthcare system budget constraints

Patent Cliffs and Market Dynamics

The pharmaceutical industry faces significant patent cliff challenges, with drugs representing approximately $350 billion in annual worldwide revenues set to lose exclusivity by 2030^5.

This industry-wide challenge affects all major pharmaceutical companies and necessitates continuous pipeline replenishment.

Lilly's heavy reliance on Mounjaro and Zepbound creates potential vulnerability should unexpected regulatory or competitive developments affect these key growth drivers.

Strategic Assessment and Outlook

Leveraging Strengths to Capture Market Opportunity

Lilly has established itself as a dominant force in the GLP-1/weight management space, combining clinical superiority with rapidly expanding manufacturing capacity.

For the remainder of 2025, the company should continue leveraging its superior efficacy data to counter competitive threats from Novo Nordisk's partnerships with PBMs and telehealth providers.

The expanded manufacturing capacity, once operational, will address current supply constraints that may be limiting full market penetration.

The company's strategic focus on both injectable and oral GLP-1 formulations provides portfolio diversity that aligns with different patient preferences and needs.

Mitigating Weaknesses Through Innovation

To address pricing pressures and competition, Lilly has already announced plans to introduce lower-priced vial doses of Zepbound and new savings options for self-paying patients in 2025.

These initiatives demonstrate the company's responsiveness to market access challenges and commitment to expanding patient reach.

The acquisition of Scorpion Therapeutics' PI3Kα inhibitor program, despite its short-term impact on earnings guidance, reflects Lilly's strategic diversification beyond the GLP-1 space.

This oncology-focused pipeline expansion provides potential future growth drivers independent from the increasingly competitive weight management market.

Capitalizing on Transformative Industry Trends

The pharmaceutical industry is experiencing a fundamental transformation through digital technologies, advanced manufacturing capabilities, and shifting global supply chains.

Lilly's substantial investments in domestic manufacturing and technology partnerships position the company favorably within these macro trends.

By establishing what could become the largest industry-academic collaboration in U.S. history with Purdue University, Lilly demonstrates its commitment to staying at the forefront of pharmaceutical innovation.

The initiative's focus on AI-powered drug discovery, technology-enabled clinical development acceleration, and advanced manufacturing aligns perfectly with broader industry evolution.

Risk Management in an Uncertain Environment

The pharmaceutical operating environment remains highly unpredictable, with potential regulatory changes, pricing pressures, and competitive dynamics creating significant uncertainty.

Lilly's diversified approach - spanning multiple therapeutic areas, global markets, and both injectable and oral formulations - provides some insulation against single-point vulnerabilities.

The company's significant manufacturing investments also reflect a proactive approach to supply chain risk management, particularly as geopolitical tensions increase the appeal of domestic production capabilities.

The political alignment of these investments provides additional risk mitigation in an environment where pharmaceutical pricing and international trade remain politically charged topics.

Final Thoughts: Lilly's Position for the Remainder of 2025

Lilly enters the second half of 2025 with tremendous momentum despite recent stock volatility.

The company's core strengths in the rapidly growing GLP-1/obesity market, combined with substantial manufacturing investments and strategic partnerships, create a strong foundation for continued success.

Key challenges remain, particularly around pricing pressure, intensifying competition, and the need to maintain technological leadership in an evolving industry.

However, Lilly's demonstrated ability to outperform competitors clinically while simultaneously expanding capacity and access positions the company well to navigate these challenges.

For investors monitoring Lilly's performance through the remainder of 2025, key metrics to watch include:

• Market share dynamics between Zepbound and Wegovy following the CVS formulary decision

• Progress on manufacturing site selection and construction

• Regulatory developments for orforglipron and indication expansions for tirzepatide

• International sales growth, particularly in newly entered markets

The company's impressive 32% projected revenue growth for 2025 reflects a pharmaceutical powerhouse operating at the cutting edge of both science and market opportunity.

While challenges inevitably exist, Lilly's strategic positioning, clinical differentiation, and forward-looking investments create a compelling foundation for continued success through 2025 and beyond.