According to some research, bull markets tend to last an average of 2.6 years. The one we are currently experiencing has been going on for almost two years -- maybe it will soon end, maybe it won't. Equities that can perform well throughout bull runs might be good to own. Those that can perform well over five years or more through bull and bear markets are even better.
Let's consider two corporations that have performed well through this bull run and have the tools to do so over the long run: Eli Lilly(NYSE: LLY) and Regeneron Pharmaceuticals(NASDAQ: REGN).
1. Eli Lilly
It's hard to find a pharmaceutical giant that has performed better than Eli Lilly in the past few years. The company's growth fuel isn't about to run out, so investors can be confident that Eli Lilly will deliver outsized returns for much longer. What's behind the drugmaker's market-beating returns? Here are two of the most critical factors.
First, Eli Lilly is delivering impressive clinical and regulatory progress. Over the past few years, the company has earned approval for important brand-new medicines. The list includes cancer drug Jaypirca, immunosuppressant Omvoh, diabetes medicine Mounjaro, weight loss drug Zepbound, and Kisunla, indicated to treat Alzheimer's disease.
Mounjaro, Zepbound, and Kisunla look particularly promising. Mounjaro generated over $5 billion in sales in 2023, its first full year on the market. Zepbound should be one of the leaders in the fast-growing anti-obesity space. And Kisunla fills a massive need: Very few AD therapies have earned approval in the past 20 years.
LLY Revenue (Quarterly) data by YCharts
Second, Eli Lilly has recorded solid financial results. The chart above doesn't fully reflect how strong Eli Lilly's results have been. The company's revenue was somewhat inconsistent due to its COVID-19 antibody treatments, which, overall, had a net positive impact on its business, contributing in ways that wouldn't have happened under different circumstances. Eli Lilly still has an exciting pipeline that features promising candidates. Retatrutide, a potential next-gen weight loss medicine, is one of many.
Meanwhile, the company will likely continue to deliver strong financial results. Analysts expect Eli Lilly's earnings per share (EPS) to increase at a 62.6% annualized rate over the next five years. Even growing at a quarter of that rate annually would be "good" for a pharmaceutical company the size of Eli Lilly.
The drugmaker has a lot going its way, and we haven't even mentioned its solid dividend program. In other words, Eli Lilly remains an excellent long-term option.
2. Regeneron
Regeneron's revenue decreased by 1% year over year in the first quarter to $3.15 billion. The company is also feeling the effects of a drop in sales of its COVID-19 antibody. Excluding this product, Regeneron's top line was up by 7% year over year. The company's most important growth driver remains eczema treatment Dupixent, comarketed with France-based biotech giant Sanofi. Dupixent is already one of the best-selling drugs in the world.
Last year, Regeneron grabbed the sixth spot on that list with worldwide revenue of $11.6 billion. It is still going strong. Dupixent's sales in the first quarter of 2024 jumped by 24% year over year to $3.1 billion. Things are about to get even better. Dupixent is close to earning a key label expansion in treating COPD in the U.S. (this approval recently came through for the European Union), which could add over $3 billion in sales to the already high-flying medicine, according to some estimates.
It is safe to say the drug will remain among the top-selling ones in the world for the foreseeable future, helping drive Regeneron's top line higher. The biotech can count on other products, too, including Eylea, a medicine for wet age-related macular degeneration (an eye disease). Libtayo, a cancer drug, is also contributing to the company's performance. And Regeneron has an exciting pipeline, including in the field of oncology.
One of the company's early-stage programs looks highly promising. It is a potential gene therapy for genetic deafness that has already cured one patient and significantly improved another in an ongoing phase 1/2 clinical trial. Regeneron's EPS will increase by about 10% per year in the next five years, according to analysts. The stock can still deliver market-beating returns.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
