Small-cap stocks have more upside potential as they are riskier assets, so investors demand higher rates of return when investing in them. However, large-cap stocks (even those valued at or near $1 trillion) can have a lot of room to trade. This is what it looks like Eli Lilly (LLY -1.30%)A pharmaceutical giant firing on all cylinders. As of this writing, the drugmaker has a market capitalization of $858 billion, but its prospects look incredibly attractive, especially due to its involvement in the lucrative market for weight-loss drugs. Can Eli Lilly create millionaires from investors at current levels? Let’s find out.

The power of weight loss pills

Eli Lilly developed a drug called Zepbound to aid weight loss. It is one of the leading products in this niche and is currently recording incredibly fast growing sales. Although it was approved within the past year, in November 2023 Zepbound is already a blockbuster drug. It usually takes years for drugs to reach this level, at least those that do. Most never do. Why is Zepbound so successful? Various reasons. First, obesity is a serious crisis, especially in the United States, which has one of the highest obesity rates in the world.

It’s worth noting that the US is by far the world’s largest pharmaceutical market, accounting for approximately 44.4% of spending as of last year. Any treatment that targets a condition as common as obesity in the country is likely to have some success. Additionally, obesity is linked to many of the leading causes of death in the United States, including heart disease, diabetes, and various types of cancer. Lowering obesity rates, a goal Zepbound can help achieve, would also reduce death rates in other areas.

A recent study found that expanding access to weight-loss medications like Zepbound could help save more than 40,000 lives annually in the United States.

There is no end to this wind

What this means for Eli Lilly and its shareholders is this: First, the company will routinely achieve outstanding financial results. When a pharmaceutical giant’s revenue growth rate is in the mid-teens, that’s already excellent. Over the past few years, Eli Lilly’s revenue growth has been somewhat disrupted by pandemic-related factors. However, the company’s revenue growth has been phenomenal over the last 12 months. Zepbound will help him maintain this momentum.

LLY Operating Revenue (Quarterly Annual Growth) data Y Charts

But Eli Lilly’s success in weight loss is also due to the fact that it is a new field with few competitors. Novo NordiskIt belongs to Wegovy. What if other companies developed more effective therapies and ate Eli Lilly’s lunch? This shouldn’t be a big concern. There will be more competition, but drug manufacturers generally specialize in one or a few specific therapeutic areas. Success in drug development in one field leads to more success. Don’t underestimate the power of past successes (and failures) in the development of new drugs.

Eli Lilly has been a leader in diabetes for 100 years. The company has other exciting weight loss candidates, including retatrutide, which may be even better than Zepbound. The second is a dual agonist: it mimics the action of two hormones, GLP-1 and GIP (the first of its kind). Retatrutide mimics the action of three hormones: GLP-1, GIP and glucagon. Eli Lilly calls it triple G.

The company’s orforgliprone, meanwhile, is an oral GLP-1 drug that some patients may prefer over injectable drugs like Zepbound and retatrutide. Eli Lilly’s work on weight loss looks set to be a significant tailwind over the next decade, given that the company is still innovative and these drugs won’t hit patent cliffs anytime soon.

Beyond losing weight

If you had invested $50,000 in Eli Lilly in November 2012, you would be a millionaire today, assuming you chose to reinvest its dividend. The company’s total return during this period reaches a compound annual growth rate of 29%. So $50,000 would be worth just over $1 million.

LLY Total Return Level data Y Charts

In my view, Eli Lilly could achieve similar performance over the next few decades, but not just because of its incredibly promising weight loss programs. The company is highly innovative. IT recently made a breakthrough In Alzheimer’s disease. The company is also working on other drugs that could add to its lucrative pipeline of a variety of non-diabetes drugs with rapidly growing sales.

The company projects average earnings per share growth of approximately 72% over the next five years, justifying its forward price-to-earnings ratio of 67.26. Of course, Eli Lilly’s dividends will continue to play a significant role in total returns. The company’s business is strong enough to maintain regular dividend increases. So, despite the drugmaker’s near-$1 trillion valuation, its prospects still look incredibly attractive. Stocks can make millionaires for those who invest a large enough amount today.