Second-Quarter Results Exceed Analyst Expectations
Eli Lilly reported stronger-than-expected second-quarter earnings on Thursday, driven by surging demand for its weight loss and diabetes treatments. The pharmaceutical company posted adjusted earnings per share of $6.31, beating Wall Street estimates of $5.57. Revenue climbed to $15.56 billion, a 38% increase year over year and above the projected $14.71 billion.
U.S. sales rose 38% to $10.81 billion, largely due to a 46% jump in prescription volume, primarily for its diabetes drug Mounjaro and weight loss treatment Zepbound. Despite the gains, the company noted that lower realized drug prices partially offset revenue growth. Net income for the quarter reached $5.66 billion, or $6.29 per share, compared to $2.97 billion, or $3.28 per share, in the same period last year.
Full-Year Guidance Adjusted Upward
On the back of strong performance, Eli Lilly revised its fiscal 2025 outlook. The company now expects revenue between $60 billion and $62 billion, up from a prior estimate of $58 billion to $61 billion. Adjusted earnings guidance was also raised to a range of $21.75 to $23 per share, compared with the previous forecast of $20.78 to $22.28.
The updated forecast reflects current U.S. tariff levels as of August 7 but does not account for potential new levies on pharmaceutical imports proposed by President Donald Trump. Eli Lilly, along with other drugmakers, has also received formal requests from the administration to reduce domestic drug prices by late September. These developments introduce a degree of uncertainty into the company’s long-term pricing strategy.
Blockbuster Drug Sales and Pipeline Developments
Mounjaro brought in $5.2 billion in quarterly revenue, up 68% from the prior year and surpassing analyst expectations of $4.49 billion. Zepbound generated $3.38 billion, representing a 172% increase and beating forecasts of $3.06 billion. CEO David Ricks said the two drugs, based on the compound tirzepatide, are on track to become the industry’s best-selling products by their third year on the market.
However, shares fell as much as 12% in premarket trading following the release of late-stage trial data for orforglipron, an experimental oral obesity drug. While the highest dose led to over 12% body weight loss, the results fell short of investor expectations. The company remains optimistic about the product pipeline and sees continued expansion opportunities in the obesity and diabetes treatment sectors.
Policy and Market Environment Present Mixed Outlook
The company’s growth comes as the pharmaceutical industry faces increased scrutiny. The Trump administration has revived the “most favored nation” policy, which could tie U.S. drug prices to lower prices available internationally. This regulatory shift may impact profit margins, particularly on high-cost treatments that contribute significantly to Eli Lilly’s earnings.
Eli Lilly’s management has signaled confidence in navigating these headwinds, emphasizing strong operational fundamentals and pipeline momentum. The company continues to monitor policy changes and assess their potential impact on product pricing, access and international trade.
