Eli Lilly Sees More Dealmaking Ahead as Management Looks To Leverage Its GLP-1 Success

The pharmaceutical industry is highly technical and incredibly competitive. That is on clear display right now in the GLP-1 weight-loss space. These are newly introduced drugs, but first-to-market Novo Nordisk (NYSE:NVO) has already been unseated as the GLP-1 leader by Eli Lilly (NYSE:LLY). What's also notable is that Eli Lilly is openly telling Wall Street what it is doing with its success: Funding acquisitions.

Eli Lilly is seeing huge GLP-1 sales gains

While Novo Nordisk was first to market with GLP-1 weight-loss drugs, it faced supply constraints. That opened the U.S. market up to generic competition earlier than normal, hampering the company's success. And it created a big opening for Eli Lilly's Mounjaro and Zepbound, which are more effective than Novo Nordisk's Wegovy.

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Eli Lilly has been doing phenomenally well. Sales of Mounjaro and Zepbound rose 125% and 80%, respectively, in the first quarter of 2026. However, there's a risk investors need to understand, because the huge sales growth these two drugs have experienced has created a significant imbalance. Together, they accounted for nearly two-thirds of the drugmaker's sales in the first quarter.

One major issue is that patent protection for new drugs is time-limited. So Eli Lilly knows that the cash windfall from its Mounjaro and Zepbound shots will eventually come to an end. But its success could be even shorter than that if a competing product comes out that is more attractive to consumers. For example, Novo Nordisk has just introduced a Wegovy pill. Consumers generally prefer pills to shots. And while Eli Lilly has introduced a GLP-1 pill, too, it is a different formulation than Mounjaro and Zepbound and appears to be less effective than Novo Nordisk's pill.

Eli Lilly sees the risks and is taking action now

To Eli Lilly's credit, the company isn't resting on its laurels. It has been actively acquiring other drug companies to broaden its pipeline of new drugs and expand into new treatment areas. For example, it recently announced three acquisitions at once, as it looked to enter the infectious disease space. These vaccine makers together could cost up to $3.8 billion, depending on the terms of earn-out provisions.

However, Eli Lilly isn't done. With Jacob Van Naarden, the Eli Lilly executive put in charge of identifying acquisition targets, going on record with CNBC to say the company has a "generational opportunity" to "grow the company for decades to come." That opportunity is driven by the healthcare giant's GLP-1 success and, as noted, is time-limited.

There's been a change in scale in 2026, with Eli Lilly taking on bigger deals. It made around 40 acquisitions in 2025, totaling $4 billion. So far in 2026, it has inked deals with eight companies with an upfront cost of $10 billion. That could reach $25 billion under earnout provisions. There's no way to predict acquisition activity, but it’s clear Eli Lilly isn't done looking yet.

Eli Lilly is making the right move

Acquisitions are risky, especially in highly technical areas like healthcare. Still, it is a good business decision for Eli Lilly to go down this path, given its GLP-1 success and the time-limited nature of the windfall.

If you own Eli Lilly, you should be very happy to see the company become more acquisitive. And you should keep a close watch on the deals it is making. Not all of them will work out as well as hoped, but it needs to see some notable wins if it wants to offset the revenue declines that will come when Mounjaro and Zepbound lose their patent protections.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.