Eli Lilly has reported a robust performance for the third quarter, significantly surpassing Wall Street expectations. The pharmaceutical giant's revenue was driven by soaring demand for its weight loss drug Zepbound and diabetes treatment Mounjaro. Despite these successes, the new GLP-1 obesity pill Foundayo, launched in the U. S. in April, fell short of analyst predictions.
The company has revised its full-year sales outlook upwards, now anticipating 2026 revenue between $91 billion and $92 billion, compared to a previous forecast of $85 billion to $87 billion. Adjusted earnings for the year are projected to range from $35 to $36 per share, which is within the previous estimate of $35.50 to $36.50 per share. This adjustment reflects a $4.07 per share increase in underlying profit guidance, offset by $4.57 per share in charges related to recent deals.
Investors responded positively, with shares rising about 4% in premarket trading. Eli Lilly's CEO, David Ricks, is set to discuss the company's earnings on CNBC TV at 9 a.m. ET. The company's financial success is underscored by its continued market share dominance over rival Novo Nordisk, despite facing lower net prices in the U. S. due to a drug pricing agreement with the Trump administration.
Market Performance and Strategic Moves
Lilly's diabetes and obesity treatments have been a windfall for the company, with Mounjaro's global revenue climbing 65% to $10.72 billion in the quarter. This figure includes $5 billion from U. S. sales, exceeding analyst expectations of $10.10 billion worldwide and $4.79 billion domestically. Sales outside the U. S. saw a remarkable 93% increase.
Zepbound, in the market for about three years, reported $5.35 billion in revenue, marking a 49% rise from the previous year. The majority of these sales were U. S.-based, surpassing analyst forecasts of $5.09 billion globally and $4.99 billion in the U. S.
In contrast, Foundayo generated $184 million in sales, falling short of the anticipated $229 million. This marks the second earnings report to include revenue from the GLP-1 pill, which competes with a rival drug from Novo launched in January.
Lilly's strategic acquisitions continue, with a recent agreement to purchase Merida Biosciences to develop treatments for autoimmune and allergic diseases. This move is part of a broader strategy to reinvest profits into expanding its treatment portfolio.
The company's U. S. revenue increased by 34% to $15.1 billion, driven by a 41% rise in product volume, particularly for Mounjaro and Zepbound. However, this was partially offset by a 7% decrease in realized prices, mainly affecting Zepbound. International sales also surged, with a 47% increase to $9.3 billion, fueled by a 76% rise in volume, though tempered by a 29% drop in prices.
Eli Lilly's net income for the quarter reached $6.45 billion, or $7.22 per share, including the $4.57 per share in deal-related charges. This compares to $5.58 billion, or $6.21 per share, in the same period last year. Excluding one-time items, the company reported earnings of $7.48 per share.
Lilly's dominance in the obesity and diabetes market is evident, holding a 63% share in the U. S. and 58.4% internationally, compared to Novo's 36.6% and 41.6%, respectively. The company's success is partly attributed to expanded U. S. coverage for obesity care, following Medicare's decision to cover GLP-1s for weight loss under a temporary pilot program starting in July.
A sales-based milestone payout of $410 million for Jardiance, a Type 2 diabetes medication developed in collaboration with Boehringer Ingelheim, also contributed to the quarter's results. This highlights Lilly's ability to leverage partnerships to bolster its financial performance.
