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Is LLY's Ventyx Deal Another Attempt at Diversification Beyond GLP-1?

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Key Takeaways

  • Eli Lilly opened 2026 with a $1.2B Ventyx deal to expand into oral small-molecule inflammation therapies.
  • LLY expects the Ventyx transaction to close in first-half 2026, pending regulatory and customary approvals.
  • LLY's 2025 acquisitions added gene therapy, oncology, pain and heart assets to reduce obesity reliance.

Eli Lilly (LLY - Free Report) has pursued a series of acquisitions since early 2025 to strengthen its pipeline and support long-term growth amid intensifying competition in the obesity space. While cardiometabolic health remains its core focus, LLY is deliberately broadening its footprint into other therapeutic areas, such as oncology, neuroscience, ophthalmology, and immunology, through targeted deals.

Eli Lilly opened its 2026 M&A activity having offered to buy Ventyx Biosciences (VTYX - Free Report) for $1.2 billion to deepen its exposure in oral small-molecule therapies targeting inflammatory-mediated diseases, where there is a high unmet need. The deal will add Ventyx’s differentiated portfolio of clinical-stage oral therapies, particularly NLRP3 inhibitors, being developed across cardiometabolic, neurodegenerative, and autoimmune indications.

The acquisition of Ventyx will enhance LLY’s long-term growth profile by expanding its inflammation franchise with scalable oral therapies that could complement or improve upon existing biologic treatments. The acquisition of VTYX is expected to close in the first half of 2026.

Eli Lilly’s M&A deal spree in 2025 ended with the closing of the Adverum Biotechnologies acquisition in late 2025, which added the latter’s lead gene therapy candidate, Ixo-vec, undergoing late-stage development to treat vision loss associated with wet age-related macular degeneration. Other M&A deals by Lilly in 2025 include the $2.5 billion acquisition of Scorpion Therapeutics’ experimental oncology drug, STX-478, a novel mutant-selective PI3Kα inhibitor. Lilly acquired SiteOne Therapeutics in a deal valued at $1 billion to strengthen its pipeline of non-opioid pain treatments. The company also closed the $1.3 billion Verve Therapeutics acquisition around mid-2025, which added a pipeline of novel gene therapies targeting heart diseases.

Lilly continues to dominate the GLP-1 drug market alongside Novo Nordisk (NVO - Free Report) . Its tirzepatide injections — marketed as Mounjaro for diabetes and Zepbound for obesity — have seen rapid demand growth despite entering the market later than Novo Nordisk’s semaglutide injections, marketed as Ozempic (for diabetes) and Wegovy (for obesity).

However, the recent FDA approval of NVO’s Wegovy pill as the first oral GLP-1 therapy represents a meaningful competitive risk to LLY’s obesity franchise. Oral dosing offers a clear convenience advantage over injectables, lowering treatment burden and potentially improving long-term patient adherence, which could initially pressure Lilly’s market share. LLY remains close on the heels of Novo Nordisk as its regulatory application seeking the approval of its oral GLP-1 pill, orforglipron, for obesity is currently under review by the FDA.

Despite its strong competitive position, Lilly is not relying on a single growth engine. Instead, it is accelerating M&A to broaden its therapeutic footprint beyond obesity, mitigating single-market risk, enhancing pipeline optionality, and supporting more balanced, durable growth amid an increasingly competitive landscape.

Other Pharma Giants Pursuing M&A Activity

In the second half of 2025, several big pharma players have announced multi-billion-dollar acquisitions, mainly in the cardiometabolic disease space.

In December, Novo Nordisk completed the acquisition of Akero Therapeutics for $4.7 billion, plus $0.5 billion in contingent milestone payments tied to FDA approval of efruxifermin (EFX), Akero’s lead pipeline candidate. EFX is an FGF21 analog being evaluated across several late-stage studies for metabolic dysfunction-associated steatohepatitis — a fatty liver disease closely tied to obesity and diabetes.

In November, Pfizer (PFE - Free Report)  acquired obesity drug developer, Metsera, for $10 billion, after a heated bidding war with NVO. This deal is significant since it marks Pfizer’s attempt to re-enter the lucrative obesity space after it scrapped the development of its oral GLP-1 drug, danuglipron, earlier in 2025. The acquisition adds Metsera’s four novel clinical-stage incretin and amylin programs in obesity, which are expected to generate billions of dollars in peak sales.

LLY’s Stock Price, Valuation and Estimates

Shares of Eli Lilly have gained 42.5% in the past six months compared with the industry’s 20.2% growth. The company has also outperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

LLY Stock Price Movement

Zacks Investment ResearchImage Source: Zacks Investment Research

From a valuation standpoint, LLY stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 32.77 forward earnings, higher than 17.54 for the industry. However, the stock is trading below its five-year mean of 34.56.

LLY Stock Valuation

Zacks Investment ResearchImage Source: Zacks Investment Research

Estimates for Eli Lilly’s 2025 earnings have improved from $23.60 to $23.78 per share in the past 60 days, and estimates for 2026 earnings have improved from $31.70 to $33.59 over the same time frame.

LLY Estimate Movement

Zacks Investment ResearchImage Source: Zacks Investment Research

Eli Lilly currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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