The core of a Vestact portfolio is comprised of large, well-known multinationals like Apple, Microsoft, and Visa. We are always on the lookout for companies operating in future high-growth industries though. We call these our 'future hero' companies.
Our track record with future hero stocks has been mixed, with some massive winners like Tesla and Nvidia, and then some duds like Illumina. On the whole though, the gains from the winners far outstrip the losses from the losers.
The latest addition to our future hero list is Eli Lilly. Can a company with a $700 billion market cap be a future hero? Anyway, the global weight-loss drug industry is just starting to take off, and Eli Lilly is expected to have the biggest market share.
A recent WSJ article noted how China's obese population is growing quickly, currently sitting between 80 - 200 million people. That's more than the 70 million obese people in the US. In percentage terms though, 40% of the US adult population is obese! Eli Lilly has partnered with Innovent Biologics, a Suzhou-based drugmaker, to make and distribute its version of the weight-loss drug in China.
For the next two years, at least, these drug companies aren't going to have a demand problem. Their issue is growing the supply chain fast enough to meet all their orders. It is a good problem to have!