Is Eli Lilly (LLY) Still the Undisputed Leader in the $150 Billion Obesity Drug Market?
Soumya Eswaran
Tue, August 4, 2026 at 8:45 p.m. GMT+5:30
3 min read
- LLY
+0.41%
Baron Capital, an investment management company, released its Q2 2026 investor letter for the “Baron Health Care Fund”. A copy of the letter is available to download here. The Fund gained 11.99% during the quarter, compared with the 10.48% gain for the Russell 3000 Health Care Index and the 15.44% gain for the Russell 3000 Index. Since inception, the Fund appreciated 10.61% on an annualized basis, compared with 10.02% for the Benchmark and 14.83% for the Index. Strong stock selection in pharmaceuticals, biotechnology, health care equipment, and life sciences tools and services supported the Fund’s outperformance, although limited exposure to managed care stocks reduced relative returns. The Fund remains positive on health care due to improving biotechnology funding, strong acquisition activity, recovering managed care margins, and growth from an aging population, chronic disease, medical innovation, and higher health care spending. In addition, please check the Fund’s top five holdings to know the best picks in 2026.
In its second-quarter 2026 investor letter, Baron Health Care Fund highlighted Eli Lilly and Company (NYSE:LLY) as a notable performance contributor. Eli Lilly and Company (NYSE:LLY) discovers, develops, manufactures, and markets human pharmaceutical products in the United States and internationally. On August 03, 2026, Eli Lilly and Company (NYSE:LLY) closed at $1,121.36 per share. The one-month return of Eli Lilly and Company (NYSE:LLY) was -9.24%, and its shares gained 46.40% over the past 52 weeks. Eli Lilly and Company (NYSE:LLY) has a market capitalization of $1.06 trillion.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q2 2026 investor letter:
“Pharmaceutical company Eli Lilly and Company (NYSE:LLY), currently best known for its diabetes and obesity GLP-1 therapies, contributed to performance as commercial execution and pipeline data reinforced investor confidence in the company’s long-term leadership. All three major pharmacy benefit managers now cover Lilly’s obesity portfolio, including its new daily oral GLP-1, Foundayo. This marks a reversal from last summer, when CVS Caremark provided preferred coverage for Novo Nordisk’s Wegovy and raised concerns about a potential price war. The shift suggests that patients and physicians prefer Zepbound and are driving demand. Clinical trial data further reinforces our view that Lilly has one of the strongest next-generation metabolic pipelines in the industry. Phase 3 data showed retatrutide delivered weight loss in the high-20% range at higher doses and nearly 20% at lower doses, while maintaining excellent tolerability. We are also excited about eloralintide, where Phase 2 data showed Zepbound-like efficacy and tolerability, with combination data expected soon. Long term, we continue to view Lilly’s portfolio as the gold standard in a category that we believe can exceed $150 billion.”
