The good news about donanemab, Eli Lilly’s Alzheimer’s drug, reached CEO Dave Ricks on July 2 as he was hiking in a remote part of Colorado.

The pharmaceutical company had slogged for 35 years and spent $8 billion to develop an effective treatment for the terrible memory-robbing disease. So when much-longed-for news of the Food and Drug Administration’s approval of the medicine finally arrived—in the middle of the Indianapolis pharmaceutical company’s annual shutdown week, with the CEO and most of his 20,000 U.S. employees on holiday—Ricks dialed into FaceTime for a quick impromptu celebration.

Eli Lilly CEO Dave Ricks in Indianapolis.

Two of his top science deputies toasted the achievement with their boss, raising glasses of Champagne as Ricks took a swig from his bottle of water. The monoclonal antibody soon to be branded as Kisunla and prescribed at a cost of $32,000 a year is not a cure for Alzheimer’s—it is meant to slow the early progression of the disease. Still, Ricks says, its approval is a sign that Lilly’s processes are working.

“For us, it’s a lesson in determination,” the 57-year-old CEO tells me, back from vacation a week later. “Many times we could have given up, and we didn’t.”

Indeed, just over a decade ago there were serious concerns about the future of the 148-year-old company. But there is plenty to celebrate lately at Eli Lilly.

The company, now the ninth most valuable in the world, returns this year to the Global 500 list, ranking No. 455 after a two-year hiatus. There are its record-breaking sales—$34.1 billion in 2023, up 20% over the previous year—and its growing stable of innovative new medicines for conditions as diverse as cancer and ulcerative colitis. Earlier this year, Lilly’s experimental gene therapy successfully cured a child of deafness. This summer, Lilly is a sponsor of Team USA at the Olympics, and you’ll see the red cursive Lilly logo on the jerseys of WNBA team the Indiana Fever (including its rookie superstar Caitlin Clark).

$791 billion
Eli Lilly’s market capitalization. Mounjaro and Zepbound, medicines for diabetes and obesity, have driven up the company’s share price to make it the world’s ninth most valuable company.

But the big story for Lilly, the main reason for its stratospheric $791 billion market cap—which makes it more valuable than Tesla, Exxon Mobil, and its fiercest pharma rival, Novo Nordisk, by the way—is the absolute mania (the Lilly-palooza?) that surrounds the company’s weight loss drug, tirzepatide.

Even before it hit the market as the diabetes medication Mounjaro, in May 2022, tirzepatide had been declared the “King Kong of GLP-1s”—poised to crush the market’s “gorilla,” semaglutide, which Novo markets as Ozempic and Wegovy. (GLP-1 drugs mimic hormones that regulate appetite. Tirzepatide is a leveling up of the category, mimicking two hormones.) It was a foregone conclusion that when Lilly released the drug as a $13,000-a-year obesity medicine, Zepbound, it would be a blockbuster.

But the scale of the excitement has exceeded even Lilly’s wildest projections. The drug’s limited side effects and incredible efficacy—on average, patients lose 18% of their body weight, even more than those on Ozempic, studies show—have made Zepbound a favorite of celebrities and TikTok-famous in its own right.

Together, Mounjaro and Zepbound have raked in $7.3 billion in sales, and that total would be even greater had Lilly been able to meet patient demand: Both forms of tirzepatide, which are weekly injectables intended for long-term use, were placed on the FDA’s national shortage list within months of Zepbound’s debut, and certain dosages remain there.

It’s hard to overstate the impact of this new class of medications, which are quickly blowing up America’s $90 billion diet industry. They have upended long-held assumptions about weight loss drugs: that they don’t work and that insurance (where the money lies for drugmakers) won’t cover them.

Not only do these drugs work, emerging evidence suggests that they effectively treat a host of related health issues, from obstructive sleep apnea to the liver disease MASH. They also seem to lower risk of cardiovascular events such as stroke and heart attack.

A tortoise among hares

Few would have expected Lilly to reach such lofty heights even a decade ago, when the company was navigating some of the most difficult years of its existence.

Eli Lilly has a long, proud history that begins in 1876 when its eponymous founder—a Civil War Union Army colonel turned chemist—opened a two-story laboratory in Indianapolis. In that era of dubious tinctures and snake oil, Lilly specialized in quality control and later staked its name on it, promoting the slogan, “If it bears a red Lilly, it must be right.”

Over the past century, the company’s major products have included the first U.S. commercial insulin, polio vaccines, penicillin, and the blockbuster antidepressant Prozac.

At the Eli Lilly and Company plant, in the finishing department, the bottles are labeled, put in to individual cartons with package literature, and then place in shipping boxes marked “Rush”. One finishing line cartons 40,000 nine dose vials in an eight hour day.

But pharma is a business of booms and busts. Ricks, who joined Lilly 28 years ago and rose through the ranks to become CEO, has been around long enough to experience both.

He joined the company several years before “Year X”—the much-dreaded date that Prozac, a drug that accounted for a quarter of the company’s revenue and a third of its profits, lost patent exclusivity, allowing other companies to manufacture it. Not even a decade later came “Years YZ,” the even more dire period in which four Lilly drugs, accounting for half the company’s sales, went generic. Worse, the cupboard was bare: Lilly had gone years without launching a new drug.

“There was a legitimate question,” Ricks remembers: “Is this actually a running concern?”

In 2009 the company’s then-CEO John Lechleiter and his leadership team made a surprising decision in an effort to save Lilly. Rather than turning to one of the industry-favored shortcuts—large-scale M&A or selling a business unit—Lilly went to investors with a plan to double down on its own research and development.

“We basically said, ‘Our path is R&D … We’re going to rebase the company. We’re going to stop growing earnings; we’re going to shrink them,’ ” Ricks recalls. “ ‘And we want you to stick with us and ride it out.’ ”

The Street wasn’t convinced: “The stock traded at $28,” Ricks notes. “That’s humbling.” (It now trades at $832.)

Slow and steady wins the race

This may have been the company’s nadir, but hard times lay ahead. Lilly’s scientists were known to be rigorous, but they were among the slowest in the industry, averaging 11 years to go from clinic to market. (Data from the time suggests the industry averaged eight years.) And too often, rather than good results, they got expensive late-stage failures. The pipeline coughed out five in a row at one point, and multiple misses in Alzheimer’s. “It was bad,” says Ricks.

At the time, a period in which most of Lilly’s competitors were capitalizing on the industry’s immuno-oncology boom, Lilly looked as if it had missed the boat. But Ricks and Dan Skovronsky, the company’s chief scientific officer, say their focus, and even the failures, provided lessons that paved the way to this year’s successes.

“We weren’t loved by Wall Street. And, you know, we got complaints,” remembers Skovronsky: “Why do you work on things that are so hard? Can’t you jump on the bandwagon where everyone else is?”

But over time, Lilly’s work on less Street-pleasing pursuits, like diabetes and Alzheimer’s, began to bear fruit. Months before he became CEO in 2017, Ricks received a call from Skovronsky, who told him about a small study in Singapore involving an experimental compound to treat diabetes: 12 participants had to drop out because they had lost so much weight that they needed to eat. It was odd, but the two men sensed a promising signal: “This is going to be something special,” Skovronsky told him. That drug was tirzepatide.

At this crossroads, one might view Lilly’s turnaround story like the fable of the tortoise and the hare, with Lilly’s plodding, persistent work on the science ultimately beating out its less focused competitors (many of which are now scrambling to get into the obesity race).

“Staying on track turns out to be a pretty important thing,” Ricks tells me, with a hint of vindication. In retrospect, he says of the company’s dark days, “we were in deep trouble—financially, we had a lot of problems—but actually our strategy was right.”

The key was patience, Skovronsky explains. “Lilly as a company can focus on hard problems for a long period of time,” he says. “It’s about resources, but also perseverance.”

The new goals: speed and science

Tirzepatide also represents a turning point for Lilly—from a company that moved too slowly to one that learned how to move fast. It took the company just six years to get tirzepatide from clinic to market—a profound transformation from the Lilly of 11-year development cycles.

Key to the whole R&D evolution was rewiring the way Lilly’s scientists thought. Ricks focused his organization on speed and science, with the goal of ridding the development process of inefficiencies, and of the biases that could lead to late-stage failure and waste.

Chart shows Eli Lilly's stock price since 1985

The first goal—to become the fastest to market in the industry—was audacious, but arguably simpler. Skovronsky led the effort to map and streamline the 800 steps of the drug development process, prioritizing saving time over saving money.

The latter goal, of getting a scientific organization to make purely scientific decisions, sounds easy but requires overcoming people’s natural biases toward particular ideas, projects, or teams. The answer, says Ricks, is more thoughtfully designing studies to produce the critical data necessary to drive decisions.

Key, Skovronsky says, was giving scientists “permission to fail,” a freeing mindset that encouraged big, creative thinking about how to get around the usual development bottlenecks. For example, rather than wait the many months it took to enroll patients in clinical trials at hospital sites, Lilly outfitted some recreational vehicles as mobile labs and went directly to communities to recruit trial participants.

By 2020’s pandemic, Lilly had proved it was no tortoise: It was the first company to develop a COVID antibody therapy, which it did in eight months. “That record is never going to be broken,” says Ricks.

Analysts and other observers now marvel at the company’s evolution. “It’s just been sort of remarkable, the amount of innovation at Lilly,” says Damien Conover, director of health care equity research at Morningstar. “They were average players for a long time,” says Mike Rea, CEO of IDEA Pharma, a consultancy that tracks innovation in the industry. “Now [Lilly is] thinking about playing the game differently, as well as just playing the same game better than other people.”

Becoming a direct-to-consumer company

Ricks gives off the casual, cheerful vibe of a Midwestern dad (which he is). He often doesn’t wear a tie—a choice, he notes, that distinguishes him from his 10 predecessors. (He recalls the formality he first encountered at Lilly, and shocking colleagues early in his career by greeting the company’s CEO in the elevator.)

Increasingly, Ricks told me, he thinks of patients as Lilly’s primary customers. That might seem like a given, but it’s actually a change in his business, where, for many years, companies like Lilly focused foremost on the physicians who prescribed their products, and then, in more recent times, the payers (insurers and pharmacy benefit managers, or PBMs) with whom they negotiated prices and coverage terms.

“Health care is a mess for consumers,” says Ricks, who adds that he wants to give people who take Lilly’s medications an Apple Store–like experience: “That’s so far from what we have now. We have a lot to aspire to in being a great consumer company.”

Shortages still plague Zepbound, Lilly’s wildly popular obesity medication.

Doing that will require disruption of the status quo, and Lilly is making some moves. In early 2023, it soft-launched LillyDirect, an online pharmacy platform to distribute its insulin products to customers. The project proved logistically challenging, given cold-chain needs and state-by-state pharmacy licensing and regulatory requirements, but by early this year it was ready to offer (at its half-off coupon rate) Zepbound, Mounjaro, and Lilly’s migraine medicine too. LillyDirect also connects patients to health care providers and other resources.

Reddit forums suggest the platform, which is supported by Amazon’s and Truepill’s online pharmacies, has been inundated and that customer feedback is mixed (skewing poor).

Ricks acknowledges there’s plenty to improve on, but says he considers the experiment so far to be “hugely successful.”

A thorny problem still unsolved

Yet all the innovation in the world can’t solve Lilly’s most pressing challenge: supply.

In March, Dave Knapp, a marketing professional and father of four from Cedar Falls, Iowa, put out a plea to Eli Lilly on TikTok: “Release the Vials!”

Knapp has taken Mounjaro for his Type 2 diabetes since 2022, and, like many others, he has struggled to fill his prescription at times. Though Lilly says it’s producing more medicine than ever before, it simply doesn’t have the manufacturing capacity to meet the current massive demand.

Lilly is furiously building more factories to produce its drugs—an investment of $18 billion since 2020. But construction of such highly regulated manufacturing facilities typically takes three to four years.

The shortage is a frequent topic of Knapp’s blog, On the Pen, which he started as a resource for fellow patients, and which has grown into an online community of tens of thousands.

“We were in deep trouble—financially, we had a lot of problems—but actually our strategy was right.”
Dave Ricks, CEO, Eli Lilly

The stories of so many desperate people—driving for hours and calling hundreds of pharmacies to find medicine; puzzling over how to adjust their drug regimens when they couldn’t find their meds—irked him. Why wasn’t Lilly better managing the issue?

Knapp understood the complexity of Lilly’s task: Tirzepatide is branded as two different drugs, each of which comes in six different dosages. The drug is distributed in single-dose injector pens, which are convenient for patients but complex to manufacture.

But he also knew Lilly had FDA approval to distribute the drug in simple single-dose vials. That requires patients to draw up the solution in a syringe themselves, but Lilly does distribute the drug this way in some foreign markets. It seemed to him that it should be easier to manufacture. Given that patients were struggling to get their prescribed medication, Knapp thought, why not release the vials to Americans too?

“They’ve had this sort of rip cord all along,” he tells me. Despite being an issue deep in the weeds of the pharmaceutical supply chain, Knapp’s call to #ReleasetheVials went viral.

It got Ricks’s attention, and he tells me he welcomes the engagement: “Consumers are getting smarter about how the industry works, and I think that’s a good thing. It’s really unheard-of in our sector, historically, that patients are sort of self-organizing online to lobby companies to make more. That’s fantastic.”

Still, Lilly hasn’t released the vials. “We’re open to every solution to address supply, including that one,” Ricks tells me in July. He expresses regret that patients are struggling to get medicines. “It’s the top priority for me and the company,” he says. “But it’s hard. It’s capital intensive, technically challenging, logistically difficult, and highly regulated, so we have a lot to work through.”

The day I visit, Ricks is bound for Pleasant Prairie, Wis., the site of a sterile manufacturing facility that Lilly recently acquired to boost production of its tirzepatide medications. And 30 miles north of Lilly’s headquarters, construction workers are laying concrete and erecting steel beams in the middle of an Indiana cornfield, providing the first glimpses of what a dust-covered billboard announces as “the future manufacturing site of Mounjaro and Zepbound.” Lilly hopes it will be operational by 2026.

Of course, Lilly isn’t waiting on this earthly slog. It’s racing ahead with its next-generation obesity drugs that many expect to unseat Zepbound. The most hyped include a triple-acting agent that promises even greater weight loss and a GLP-1 in pill form. It’s also moving urgently to launch its new Alzheimer’s drug, Kisunla. And it’s pouring billions more into R&D this year.

At this moment of unprecedented success, Ricks has a new anxiety. “A lot of companies become mediocre as they grow,” he tells me. The goal now is to keep rising “above the regular.”

“That’s our purpose,” he says. “To do important things at scale.”

This article appears in the August/September 2024 issue of Fortune with the headline “The Lilly-palooza.”

How Eli Lilly went from pharmaceutical slowpoke to $791 billion juggernaut