Eli Lilly Stock History — The Motley Fool

Eli Lilly and Company (NYSE:LLY) generates over 40% of its sales from diabetes medications, including insulin, and its sales could grow significantly over the coming decade because of an increasingly larger and longer-living global population. In the United States alone, the number of people with diabetes is expected to grow to nearly 55 million in 2030, from about 30 million in 2017, according to the Institute for Alternative Futures (IAF).

The company’s in a position to benefit from growing demand for diabetes treatments, but diabetes isn’t the only market Eli Lilly’s tackling. It also has a history of successfully developing cancer drugs. If you’re considering whether to include Eli Lilly in your portfolio, here’s what you need to know about its past, present, and future.

The diabetes drug market is huge

Diabetics either are unable to produce insulin (Type 1 diabetes) or have become resistant to the insulin they do produce (Type 2 diabetes).

A blue key on a keyboard with the word DIABETES printed on it


In healthy people, insulin is created by beta cells in the pancreas in response to elevated levels in the bloodstream of glucose, a sugar found in carbohydrates. The insulin produced in the pancreas is used by the body to convert glucose into energy, or to store it in the muscles or liver as a future source of energy.

Unfortunately, diabetes is a life-threatening disease. It can lead to nerve damage that contributes to infections, kidney disease, and cardiovascular disease. Overall, diabetes is the No. 7 cause of death in America.

Currently, over 30 million Americans are living with diabetes, and according to the Centers for Disease Control, about 1.5 million people develop it every year. As baby boomers age and diets that contribute to obesity — thought to be a factor in Type 2 diabetes — become more common, the number of people with diabetes is expected to increase significantly.

IAF estimates there were 90 million Americans with prediabetes in 2015, and that by 2030, that figure will increase to 108 million. As more patients with prediabetes develop full-blown diabetes, the number of people with diabetes will increase by over 20 million in the next 12 years.

There’s no cure for diabetes yet, and eventually, most diabetics require daily medication, including insulin. The chronic nature of the disease and the sheer size of the patient population mean that spending on diabetes is massive. Between 2007 and 2012, the cost of diabetes — including economic costs such as lost wages — increased 74%. And those costs are forecast to increase from about $400 billion in 2015 to over $620 billion by 2030, according to IAF.

The cancer drug market is huge, too

Our bodies are made up of cells produced by genes, but sometimes mutations produce abnormal cells that multiply and spread. When that happens, it’s called cancer.

Cancer is unfortunately common. Over 15 million Americans either are cancer survivors or are currently receiving treatment for cancer, and according to the American Cancer Society, there’s a 1 in 3 chance of developing some form of cancer over a person’s lifetime. In the U.S. alone, about 1.5 million people are diagnosed with cancer, and over 600,000 Americans pass away from it every year.

In men, the most common cancers are in the prostate, lung, and colon. In women, breast cancer is the most common, accounting for about 30% of new diagnoses; lung cancer and colon cancer are also common in women.

Cancer treatment has been improving, but there’s still significant need for improvement. For instance, the American Cancer Society reports that the rate of deaths associated with female breast cancer has declined by 39% since 1989, to 20.3 per 100,000 people, yet roughly 41,000 women with breast cancer will pass away this year in the United States. Similarly, lung cancer’s death rate has fallen 45% since 1990 (largely due to fewer people smoking), yet over 154,000 people will die from it in 2018.

Because cancer treatment requires significant intervention that often includes pricey medications, over $80 billion is spent in the U.S. on direct medical costs associated with cancer, according to the Agency for Healthcare Research and Quality. A good chunk of that spending is on drugs. According to information research company IQVIA, annual spending on cancer drugs has doubled since 2012 to $50 billion, and the median price for newly approved cancer drugs has increased since 2013 from $79,000 to over $160,000.

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