Excellent data from late-stage trials has already been released for potential new indications for tirzepatide. One of these is reducing the risk of worsening heart failure in adults who have heart failure with preserved ejection fraction and obesity. Tirzepatide also aced phase 3 studies in preventing diabetes in patients with pre-diabetes who are overweight or obese, and it successfully treated sleep apnea in overweight patients.

Tirzepatide is a dual agonist — it mimics the function of two hormones, GLP-1 and GIP — and its success shows the power of this approach. The sky’s the limit if we add other potential indications that haven’t passed late-stage trials yet. Analysts weren’t kidding when they said tirzepatide could hit peak sales of $25 billion.

Second, several of Eli Lilly’s newer medicines not named tirzepatide will eventually make meaningful impacts within the next five years. Kisunla looks promising, but it’s not the only one. Some projections say that ulcerative colitis treatment Omvoh, first approved last year, could generate $1.2 billion in sales by 2029.

Third, Lilly will make significant pipeline progress in the next few years. One of its promising candidates is retatrutide, a triple agonist. Remember that tirzepatide is a dual agonist. Now, Lilly is going one step further with retatrutide, which mimics GLP-1, GIP, and glucagon; the company has dubbed it “triple G.” Progress on this program could be a tailwind for the company. And it’s by no means Eli Lilly’s only exciting candidate.

Thanks to its innovative pipeline, the drugmaker’s lineup should look different in five years. That’s something else that will help drive the stock price higher.

Even with Eli Lilly’s strong prospects, you might hesitate to invest in it because of the high forward P/E, which looks prohibitive. However, its shares don’t seem as expensive once we put things in context. The forward P/E reflects the market’s expectations for the company. If it can match those expectations more often than not, its valuation won’t be too much of a problem. In the third quarter, Eli Lilly’s adjusted earnings per share (EPS) soared to $1.18, compared to just $0.10 in the year-ago period.

Next year, analysts expect EPS to grow by almost 72%. This isn’t surprising, considering tirzepatide’s pace and the fact that several of Lilly’s older medicines are also performing well. The company could keep things up with newer drugs hitting their stride, and tirzepatide earning label expansions. So, in my view, Eli Lilly is worth investing in despite its forward P/E. I’d recommend following billionaire Englander’s lead on this one.

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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.

Billionaire Israel Englander Increased His Stake In Eli Lilly During the Third Quarter: Should You? was originally published by The Motley Fool