- Lilly crushed estimates. Third-quarter adjusted EPS was $7.48 versus $6.26 expected and revenue was $24.40 billion versus $22.61 billion, and the shares rose about 9% Thursday.
- The sales outlook jumped. Lilly now expects 2026 revenue of $91 billion to $92 billion, up from $85 billion to $87 billion, a $5.5 billion increase at the midpoint (Lumida calculation). Its adjusted EPS outlook moved to $35 to $36 from $35.50 to $36.50 because a $4.07 underlying raise was offset by $4.57 a share of deal charges.
- The injectables did the heavy lifting. Mounjaro revenue rose 65% to $10.72 billion, beating the $10.10 billion StreetAccount estimate, with sales outside the US up 93%, while Zepbound grew 49% to $5.35 billion versus $5.09 billion expected.
- The pill was the soft spot. Foundayo brought in $184 million against forecasts of around $229 million, though Lilly said US prescriptions and new patients doubled from the prior quarter and about 4 in 10 patients starting an oral obesity drug choose it.
What Happened?
Lilly reported Thursday morning, with US revenue up 34% to $15.1 billion on a 41% volume increase, partly offset by a 7% drop in realized prices driven mainly by Zepbound. Sales outside the US climbed 47% to $9.3 billion on a 76% surge in volume and a 29% decline in realized prices. Net income rose to $6.45 billion from $5.58 billion a year earlier, and the quarter included a $410 million sales-based milestone payment for Jardiance from its Boehringer Ingelheim collaboration.
Why It Matters?
Lilly is widening its lead over Novo Nordisk, holding 63% of the US obesity and diabetes drug market in the quarter versus Novo’s 36.6%, and 58.4% internationally versus 41.6%. Lower US prices after last year’s drug-pricing deal with the Trump administration are being outweighed by volume, helped by Medicare’s temporary pilot covering GLP-1s for weight loss since July. CEO Ricks estimated only 3% to 10% of eligible US patients access obesity care and said the “room for expansion here of this market is dramatic.” The S&P 500 health care sector hit an all-time high Thursday, up more than 2%, according to CNBC’s live coverage.
What’s Next?
Lilly expects Foundayo to win US approval for Type 2 diabetes in the fourth quarter, which could broaden the pill’s market as it competes with Novo’s oral drug launched in January. Investors will watch whether volume growth keeps outrunning price declines, and how Lilly deploys its profits after deals such as its agreement to buy Merida Biosciences.
