First 2x ETF Tied to Blazing Hot Eli Lilly Debuts

Traders can now get leveraged exposure to the hottest healthcare stock through an exchange-traded fund. 

Today, Defiance unveiled the 2x Eli Lilly Bull ETF (LLYX), a single stock fund tied to the world’s most valuable healthcare company.

Eli Lilly is the maker of the weight loss drug Zepbound. Lilly, along with rival Novo Nordisk—creator of the competing drug Wegovy—dominate the market for a class of drugs that help people lose weight by mimicking the GLP-1 hormone. 

These drugs are forecast to become some of the best sellers of all time as they cater to a market of potentially tens of millions of customers.

That potential was on full display on Thursday, when Eil Lilly reported that its profit per share soared 68% over last year in Q2 thanks to insatiable demand for Zepbound.

Shares of the company’s stock were trading up by 8% on the day, bringing its year-to-date gains up 44%.

If it had debuted before today, the leveraged LLYX would be up around 16%. 

But traders who believe that there is more juice to the rally in Eli Lilly’s stock might still be interested in the ETF, even at current prices.

Eli Shares 12% Below All-Time High

After today’s rally, shares of Eli Lilly were down 12% from their all-time highs set last month. Given that demand for the company’s weight loss drug won’t be slowing anytime soon, it’s possible that the stock could make a run back to its highs later this year. 

In addition to Zepbound, Lilly is banking on Kisunla, its recently approved Alzheimer's drug, to boost its bottom line.

On the other hand, a trade or investment in Eli Lilly or its leveraged counterpart isn’t without risk. The company's stock is trading at a lofty valuation—44x estimated 2025 earnings.

If Zepbound sales disappoint even slightly down the line—or even if they don’t—shares of Lilly could take a hit—provided investors are no longer willing to put such a premium price tag on the stock.    

The risks are magnified for LLYX.

Nevertheless, whether this ETF tied to a scorching hot healthcare stock can garner as much excitement as with single stock ETFs tied to other highflyers like Nvidia and Tesla will be interesting to see.