Cathie Wood Is Loading Up on This GLP-1 Stock That Has Soared 1,600% Over the Past 10 Years

Cathie Wood, the CEO of Ark Investment Management, is a staunch believer in innovation. The firm she leads is known for investing in companies making breakthroughs across various fields, including healthcare. One leader in the sector that Cathie Wood is doubling down on is Eli Lilly (NYSE: LLY), the top player in the GLP-1 market. Eli Lilly has made significant breakthroughs over the past decade, and the stock has outperformed broader equities, gaining over 1,600% during this period. But can the stock still deliver solid returns?

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It could be just the beginning

Eli Lilly's tirzepatide, a GLP-1 medicine indicated to treat diabetes, weight loss, and obstructive sleep apnea, is breaking records. Tirzepatide exceeded $30 billion in annual sales last year across all its indications, a feat almost unheard of for a medicine first approved just four years ago. Tirzepatide still has strong momentum and should allow Eli Lilly to post excellent revenue and earnings growth over the medium term. But there are plenty of other reasons to be excited about the company's prospects.

Eli Lilly launched Foundayo, an oral GLP-1, earlier this year, and it is also seeing huge success, especially with patients who had never taken GLP-1 medicines before. This highlights the large opportunity in the anti-obesity market that Eli Lilly could tap into as it launches new, differentiated products. The company's pipeline features candidates such as retatrutide, which will likely target patients who need more aggressive weight loss options. Eli Lilly has one of the deepest weight loss pipelines in the industry, and the company should ride the soaring demand for these products over the next few years. Eli Lilly is also making solid progress in other areas.

Several of the company's newer approvals, such as Kisunla, a drug for Alzheimer's disease (AD), could eventually generate over $1 billion in annual sales. Eli Lilly is developing a new AD medicine, remternetug, that is currently in phase 3 studies. The company is testing remternetug in subcutaneous injection and intravenous (IV) infusion delivery. Kisunla is only administered via IV infusion, which requires patients to go to the hospital or some other specialized center every four weeks. So, remternetug could be more convenient for patients.

That's one of the reasons this newer AD therapy looks promising. And it is just one example of Eli Lilly's efforts to diversify its lineup. The company boasts attractive programs across immunology, oncology, neuroscience, rare diseases, and pain management. Eli Lilly isn't just a GLP-1 stock, and the company could make more breakthroughs over the medium term, leading to much-improved financial results and a superior stock performance. That's before we factor in the company's artificial intelligence-related work -- which could speed up its drug development process -- as well as its strong dividend program.

Eli Lilly is one of the top pharmaceutical stocks to buy, in my view. Ark Investment Management's recent decision to double down and purchase more shares was a great one.

Prosper Junior Bakiny has positions in Eli Lilly. The Motley Fool has positions in and recommends Eli Lilly. The Motley Fool has a disclosure policy.