In the recent concall management mentioned that each pen cost ranging from $2 to $8. Total capacity will reach by 2028 will be 50 million pens. If we consider mean value of pens to $4 each can translate into 1600 crs revenue for health care segment it self. If they make 16% net margins it will translate into 256 crs net profit from health care segment alone.
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You cannot apply flat 16% PAT margin on the total revenue. Medical segment is growing faster and we know that margins are much larger for medical segment.
But we don’t have margins by business segment. So lets try to get that first.
We have the following data.
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Revenue for last 3 quarters.
Q1 - 179
Q2 - 192
Q3 - 198 -
PAT for last 3 quarters
Q1 - 17
Q2 - 22
Q3 - 25 -
Segment wise revenue perc. Consumer, Health, Industrial respectively.
Q1 - 74, 15.3, 10.7
Q2 - 72.2, 19.5, 8.3
Q3 - 71.5, 22.1, 6.3
Consider the PAT margin segment wise (Consumer, Health, Industry) is (x,y,z) respectively.
With above information we get 3 linear equations:
eq1 : 141.57x + 43.56y + 12.47z = 25
eq2 : 138.6x + 37.44y + 15.93z = 22
eq3 : 132.46x + 27.38y + 19.15z = 17
Solving above equations we get:
- Consumer PAT margin = x = 2.58%
- Health PAT margin = y = 48.6%
- Industry PAT margin = z = 1.47%
Now lets try to extrapolate for 2028.
Consumer:
Lets take a base case of 10% growth pa. Current fy lets take revenue as 550cr.
| * | fy25 | fy26 | fy27 | fy28 |
|---|---|---|---|---|
| Rev | 550 | 605 | 665.5 | 732 |
| PAT | 14.19 | 15.6 | 17.15 | 18.88 |
Health
Company has guided for 50M pens for fy28. Taking this with a pinch of salt lets consider they succesfully scale this to 40M pens. Taking a base case of ~200 per pen revenue. Total revenue turns out to be 800cr.
With a margin of 48.6% this turns out to be 388.8cr
Industrial
Lets take a base case of 8% growth. Current fy lets take revenue as 94.
| * | fy25 | fy26 | fy27 | fy28 |
|---|---|---|---|---|
| Rev | 94 | 101.52 | 110 | 119 |
| PAT | 1.38 | 1.49 | 1.67 | 1.74 |
With this the fy28 PAT comes around. 18.88+389+1.7 ~ 410cr.
Disclaimer: Not invested, but really like the company for its technical capabilities.
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There is one fundamental risk that has emerged to the GLP-1 thesis in Shaily. I have been following the progress of Orforglipron over last few months some of things that have emerged are a bit concerning. Orforglipron is a small molecule that was designed from the ground up to mimic GLP-1R agonist. The trials have been ongoing for awhile and now the earliest data readouts will happen from this month onward.
This ACHIEVE trials are for diabetes and ATTAIN trials for obesity. In phase 2, the weight-loss % achieved is close to 15% just like Wegovy. The safety profile of the molecule appears to be similar to semaglutide as well. However, we need to wait and see how the TEAE readout is in Jun '25 for diabetes.
Lilly appears to be confident enough to stockpile $550m of the drug with the capitalised inventory potential contribution to sales could be $10b. This they have been doing for awhile but generally when phase-3 trials are not stopped, its very likely safety isn’t very bad (this is what has changed. we are now just weeks away from readouts).
The other interesting thing is Lilly’s strategy with Orforglipron
From q3 call - here he seems to be implying that they will compete with generic semaglutide (this will be market for Shaily/Natco/Onesource)
Positioned against patients with needle fear, as well as emerging markets (since its small molecule, it doesn’t need refrigeration like sema/tirze)
They seem to want to globalize rapidly and also scale up production fast.
Since there’s no sterile packaging, pen/autoinjector, complex biologic manufacturing etc. as its a small molecule, pricing can be a fraction of the biologic GLP-1 and also even with huge markup, can still compete with generic sema.
The way weight-loss drugs are evolving is quite rapid. Lira got killed by Sema in 5 years post launch. Tirze is already doing better than Sema a year after launch (UK NHS prescription data. Lilly CEO implies something similar in the ET podcast for US)
So we need to see how this landscape evolves over the next year or two which will be very crucial.
Recently Lilly launched Mounjaro and the CEO was in India. There are few very good podcasts, interviews he did while he was here. The ET podcast, CNBC interview etc. are good to understand how they are thinking of positioning the oral molecule.
While Rybelsus didn’t do so well being oral peptide, Orforglipron cannot be ignored the same way as its efficacy appears to be a lot better (~15%) than Rybelsus (6-7% weight loss).
Disc: Invested, but reduced a bit in last few weeks
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Orforglipron is of strategic importance to Eli Lilly ($LLY) because it represents a transformative opportunity to strengthen its leadership in the rapidly growing weight-loss and GLP-1 drug market, projected to reach $150 billion by the 2030s. As an oral, once-daily GLP-1 receptor agonist, orforglipron addresses key limitations of $LLY’s current injectable offerings (e.g., Zepbound, Mounjaro) and positions the company to capture new patient segments, enhance market penetration, and maintain a competitive edge over rivals like Novo Nordisk. Here’s why it’s a critical asset for $LLY:
- Expanding Access with Oral Delivery
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Why It Matters: Most GLP-1 drugs, including $LLY’s Zepbound (tirzepatide) and Novo Nordisk’s Wegovy (semaglutide), are injectables, which deter patients with needle aversion (estimated at 20-30% of potential users) and complicate logistics (e.g., cold storage, administration training). Orforglipron, as a pill, eliminates these barriers, making it easier for patients to adopt and adhere to treatment.
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Strategic Impact: By offering a convenient oral option, $LLY can tap into a broader population—potentially millions more patients globally—who avoid injectables. This is especially vital in emerging markets like India or China, where needle-based therapies face cultural and practical resistance.
- Competitive Advantage Over Novo Nordisk
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Why It Matters: Novo Nordisk’s Rybelsus (oral semaglutide) is the only FDA-approved oral GLP-1 drug as of 2025, but it has limitations: it requires fasting (taken 30 minutes before food or drink), has lower bioavailability, and achieves less weight loss (6-10% vs. 15-20% for injectables). Orforglipron, a nonpeptide GLP-1 agonist, promises no dietary restrictions, better absorption, and efficacy closer to injectables (9-14% weight loss in Phase 2 trials over 36 weeks).
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Strategic Impact: If Phase 3 trials (e.g., ATTAIN program) confirm these advantages, orforglipron could outshine Rybelsus, allowing $LLY to leapfrog Novo Nordisk in the oral GLP-1 segment. This strengthens $LLY’s position in a two-horse race dominating 90% of the GLP-1 market.
- Addressing Supply Chain and Manufacturing Challenges
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Why It Matters: Injectable GLP-1s like Zepbound faced shortages (resolved by October 2024) due to complex manufacturing (e.g., sterile production, prefilled pens) and cold-chain distribution. Oral drugs like orforglipron are simpler to produce at scale—tablets don’t require sterile conditions or refrigeration—reducing costs and supply bottlenecks.
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Strategic Impact: $LLY can meet surging demand more efficiently, avoiding the supply constraints that allowed competitors like $HIMS to gain traction with compounded alternatives during shortages. Analysts estimate orforglipron could add $8-10 billion in annual sales by 2030, per Morgan Stanley, if supply scales smoothly.
- Diversifying Revenue and Reducing Reliance on Injectables
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Why It Matters: $LLY’s GLP-1 portfolio—driven by Mounjaro and Zepbound—generated $13.2 billion in 2024 revenue, but injectables face long-term risks like patient fatigue, competition from generics (post-patent expiration in the 2030s), and potential shifts in preference. Orforglipron diversifies $LLY’s offerings, adding a high-growth oral segment.
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Strategic Impact: With a potential 2026 launch (pending Phase 3 success), orforglipron could extend $LLY’s GLP-1 dominance into the next decade, targeting both weight loss and type 2 diabetes (via the ACHIEVE trials). It’s a hedge against over-reliance on tirzepatide, ensuring sustained growth as the market evolves.
- Capturing the Mass Market and Insurance Coverage
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Why It Matters: Oral medications are often perceived as less invasive and more routine, increasing patient and physician acceptance. This could drive higher insurance coverage and formulary inclusion compared to injectables, which insurers sometimes restrict due to cost (e.g., Zepbound’s $1,000+ list price vs. $349 self-pay via LillyDirect).
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Strategic Impact: $LLY aims to price orforglipron competitively—potentially below injectables—to secure broad reimbursement, mirroring LillyDirect’s affordability push. This could make it the go-to GLP-1 for the mass market, boosting volume over premium pricing and locking in long-term market share.
- Countering Telehealth Disruptors Like $HIMS
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Why It Matters: Telehealth platforms like $HIMS have gained ground by offering affordable oral weight-loss options (e.g., generic liraglutide, compounded kits) and reselling $LLY’s Zepbound. Orforglipron gives $LLY a direct oral contender to neutralize these disruptors, who lack proprietary R&D.
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Strategic Impact: By pairing orforglipron with LillyDirect, $LLY can undercut $HIMS’ pricing (e.g., $1,899/month for Zepbound) and reclaim control of the oral weight-loss space, reducing reliance on third-party distributors and reinforcing its brand.
- Long-Term Market Leadership
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Why It Matters: The GLP-1 market is shifting toward convenience and efficacy, with oral drugs projected to grow faster than injectables (CAGR of 15-20% vs. 10-12% through 2030, per industry forecasts). Orforglipron, combined with $LLY’s injectable retatrutide (a triple agonist), positions $LLY to lead both segments.
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Strategic Impact: Success with orforglipron could push $LLY’s GLP-1 sales past $50 billion annually by 2033 (JPMorgan estimate), cementing its edge over Novo Nordisk and smaller players. It’s a cornerstone of $LLY’s ambition to own the obesity and diabetes treatment landscape.
Conclusion
Orforglipron is strategically vital to $LLY because it unlocks convenience, scalability, and market expansion in a way injectables can’t. It counters competitors’ oral offerings, resolves supply chain vulnerabilities, and broadens $LLY’s reach—potentially making GLP-1 therapy as routine as taking a daily pill. If Phase 3 data (expected 2025) deliver, orforglipron could redefine $LLY’s growth trajectory, ensuring it stays ahead in a fiercely competitive and lucrative market.
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People who are talking about Oral, need to understand, Shaily has signed with multple other GLP drug org…I asked the same Q to Sajal in its paid substack , here is his response..I personally see, too much generalization from pharma experts
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Added to this , Shaily is expanding capacity, do I have to believe, they have no idea the threat from Oral Solids, given the quality of mgmt ? Definitely Q4 concall will be a good platform to ask these Qs.
Also .if mkt is really worried on Shaliy and Oral solids..why Shaily moved almost 40% in last 1 week ? Ultimately Retail investors sold out and smart investors bought it…
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No, significant numbers of Generic ones r also coming..nothing like that..DRL + other cos r also launching
Here is the much anticipated phase 3 results for Orforwhatsnot.. 
Eli lilly stock is up 14%, Novo Nordisk down nearly 10% …lets see what shaily does next week .
Disclosure : Was invested in Shaily but booked out around 1440 fearing this news .
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Oral usage gets FDA approval
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@Prdnt_investor , what will be its impact on Shaily??
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Excellent Results from OneSource…Presentation is all about significantly on ‘Drug Device Combination’ and future strategy…concall will be useful 2 know about Oral Solid issue
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@nil_71
Wht kind of tie-up shaily has with Lilly ?
Formulation tie-up ? or Packaging supply tie-up ?
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Shaily declares good set of numbers - numbers looks good both YOY and QOQ
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Pharma is a very complex subject, it’s very difficult to make unit level economics or what threat will decimate the business unless, mgmt is questioned by people who understands pharma better than me
Coming to concall, Shaily is planning to sell 30-35 Million Pens, that is 70% higher than in FY25. Significantly led be IP led Pens. ( Q to me here - if Oral solid is a serious serious threat, why mgm will expand capacity ??) Planning to expand PEN capacity by 40-45 Million in 18-20 Months. Mgmt mentioned that threat of Oral Solid is there but it is expected to occupy 25% of total addressable market as efficacy of oral solids is less than Injectibles…
Rest will listen to recorded concall…also need to go through couple of times…
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Shaily already selling these kind of products, please go through Q4 concall..