Eli Lilly and Company

What they do

Eli Lilly discovers, develops, manufactures, and markets human pharmaceutical products in a single business segment. Its products are sold in approximately 90 countries, with manufacturing facilities in the U.S. (including Puerto Rico), Europe, and Asia. Key therapeutic areas include cardiometabolic health (e.g., Mounjaro, Zepbound), oncology, immunology, and neuroscience.

Revenue drivers

• Mounjaro (tirzepatide) — A GIP/GLP-1 receptor agonist for type 2 diabetes; drove significant volume growth and is a primary revenue contributor alongside Zepbound.
• Zepbound (tirzepatide) — Approved for obesity and overweight with weight-related comorbidities; major volume driver in U.S. and internationally, with growing indications.
• Other Key Products (Immunology, Oncology, Neuroscience) — Includes products like Omvoh (mirikizumab), Kisunla (donanemab), Jaypirca, and Inluriyo; grew 121% in Q2 2026 versus prior year.

Recent performance

In Q2 2026, revenue rose 48% to $22.97 billion, driven by a 60% volume increase partially offset by 13% lower realized prices. U.S. revenue increased 33% to $14.4 billion and non-U.S. revenue grew 80% to $8.6 billion. Reported diluted EPS was $7.94 (up 26%), net income $7.1 billion. For the first half of 2026, revenue totaled $42.8 billion, net income $14.5 billion, and diluted EPS $16.19.

Strategy

Lilly's long-term success depends on continual discovery, development, and commercialization of innovative medicines. Key near-term priorities include advancing pipeline assets like retatrutide (obesity, OSA, knee OA) toward regulatory submissions, expanding manufacturing capacity (committed an additional $4.5B in Indiana in Q2 2026), and pursuing accretive business development (five acquisitions in Q2 2026, including Orna, Ajax, Centessa, and Kelonia). The company also focuses on securing regulatory approvals and label expansions for existing products.

Risks

• R&D failure risk — Pharmaceutical R&D is costly and has a high failure rate; late-stage setbacks can significantly impair expected returns and impair manufacturing investments.
• Pricing and reimbursement pressure — Global cost-containment measures, mandated discounts, and restrictive formularies are pressuring realized prices, particularly for Mounjaro and Zepbound.
• Competition and patent expiration — Loss of exclusivity or displacement by competing therapies (e.g., other GLP-1 drugs) could erode revenue from key products like Trulicity, Humalog, and Mounjaro.
• Regulatory and policy uncertainty — Changes in healthcare policy, drug pricing regulations, or intellectual property protections could adversely affect Lilly's ability to commercialize products.

Outlook

Management raised full-year 2026 revenue guidance to $85.0–$87.0 billion and underlying non-GAAP EPS to $35.50–$36.50, reflecting strong momentum. Pipeline progress includes retatrutide Phase 3 data package complete for global obesity/OSA/OA submissions planned for Q1 2027, and FDA approval of orforglipron for obesity. Continued investment in manufacturing and business development is expected to support long-term growth.