Eli Lilly's GLP-1 Boom Meets Tariff Turbulence: What's Next For LLY Traders And These Direxion Single Stock Daily LETFs?

The pharmaceutical sector is often labeled as recession-resistant—but that doesn't mean it’s shielded from near-term volatility. With tariff policy shifts, FDA decisions and competitive pressure in the obesity and diabetes treatment space, stocks like Eli Lilly (LLY) are increasingly in the crosshairs of short-term traders.

A heavyweight in the global pharma market, Eli Lilly has been on a tear—thanks to blockbuster GLP-1 drugs. But CEO warnings around geopolitical risk, combined with ongoing supply chain vulnerabilities, suggest price action could remain highly reactive in the weeks ahead.

GLP-1 Boom Sends Revenue Soaring

In 2024, Eli Lilly reported $13.53 billion in global revenue, up 45% year-over-year. That surge was powered by GLP-1-based drugs Mounjaro and Zepbound, which address both diabetes and obesity—two health concerns with strong global reach.

• Zepbound (obesity): $3.15B in U.S. Q4 2024 revenue
• Mounjaro (Type 2 diabetes): $5.64B in U.S. Q4 2024 revenue

New approvals are extending this growth story: the FDA recently cleared Zepbound for obstructive sleep apnea in adults with obesity and approved Omvoh® for Crohn's disease. And in a potential game-changer, Eli Lilly beat Novo Nordisk to market in India, launching its GLP-1 drug in the world's most populous nation—a key growth frontier.

Short-Term Catalysts on the Radar

Despite its strong fundamentals, LLY shares fell 9% in April 2025 following President Trump's tariff announcement, underscoring the stock's sensitivity to political and economic headlines. Traders should consider keeping an eye on these upcoming short-term catalysts:

• June 2025: Potential Fed rate cut may shift biotech valuations.
• Tariff exemptions: Pharma spared for now, but that could reverse suddenly.
• GLP-1 supply: FDA investigations, counterfeit crackdowns, and global shortages remain an active risk.
• July to August 2025: Expected Q2 earnings reports, plus R&D spending updates could reveal margin compression.

Eli Lilly CEO David Ricks has warned publicly that if tariffs bite deeper into input costs, LLY may be forced to reduce R&D spend—a potential red flag for long-term growth expectations.

Meanwhile, a U.S. federal court ruling recently denied compounding pharmacies the right to produce copies of Lilly's GLP-1 drugs—removing a bearish overhang but further constraining market supply, possibly stoking price volatility in both directions.

Trade Eli Lilly's Moves with Leveraged Exposure from Direxion

For active traders seeking to capture this volatility, Direxion offers two targeted, leveraged or inverse ETFs:

• Direxion Daily LLY Bull 2X Shares ELIL: Provides 2X the daily performance, before fees and expenses, of Eli Lilly's common stock
• Direxion Daily LLY Bear 1X Shares ELIS: Offers inverse 1X daily performance, before fees and expenses, for bearish or hedging strategies

These ETFs are tactically designed for short-term use, ideal for trading directional moves around earnings, regulatory catalysts, or geopolitical shocks. It’s crucial to approach these leveraged products with a clear understanding of their risks and these ETFs are best suited for those who can actively manage the inherent risks of leverage. The amplified or inverse exposure is not for the faint of heart—but for those who monitor positions closely, it can provide a precision tool to trade LLY's breakout or breakdown scenarios.

Click here to explore Direxion's full suite of Single Stock Daily LETFs.

Featured image by Ani Kolleshi on Unsplash.

This content is sponsored and for informational purposes only. It is not intended as investing advice.

An investor should carefully consider a Fund's investment objective, risks, charges, and expenses before investing. A Fund's prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund's prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund's prospectus and summary prospectus should be read carefully before investing.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock's performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock's performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock's performance increases, and the Bear Fund will lose money even if the underlying stock's performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in LLY.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund's investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund's other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund's correlation with LLY and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund's ability to achieve a high degree of correlation with LLY and therefore achieve its daily leveraged investment objective. The Bull Fund's exposure to LLY is impacted by LLY's movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to LLY at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to LLY increases on days when LLY is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund's ability to achieve a high degree of inverse correlation with LLY and therefore achieve its daily inverse investment objective. The Bear Fund's exposure to LLY is impacted by LLY's movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to LLY at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to LLY increases on days when LLY is volatile near the close of the trading day.

Pharmaceutical Industry Risk – The profitability of pharmaceutical companies is highly dependent on the development, procurement and marketing of drugs and the development, protection and exploitation of intellectual property rights and other proprietary information.

Healthcare Sector Risk – Companies in the healthcare sector may be affected by extensive, costly and uncertain government regulation, rising costs of medical products and services, and changes in the demand for medical products and services.

Eli Lilly and Company Investing Risk — LLY faces risks associated with: costly and uncertain research and development of its products; maintaining intellectual property protections; intense competition from multinational pharmaceutical companies, biotechnology companies, and lower-cost generic and biosimilar manufacturers; among other risks.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily LLY Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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