Eli Lilly’s Strong 2Q Underscores the Momentum Behind Its GLP-1 Franchise
Eli Lilly’s second-quarter results and another upward revision to 2026 guidance reinforce the strength of its GLP-1 franchise and the broader global expansion of the obesity market.
Beat-and-Raise Quarter
Lilly delivered a clear beat on both the top and bottom lines, driven by continued strength in Zepbound and Mounjaro. Revenue came in at $23.0 billion, well ahead of Morgan Stanley’s $20.8 billion estimate and the $20.7 billion consensus. Non-GAAP EPS of $8.38 also topped expectations ($6.04 MS / $6.01 consensus), even after a $3.03 acquired IPR&D charge. Excluding that charge, EPS would have been roughly $11.41.
Margins remained a bright spot. Gross margin hit 86.3% and performance margin reached 54.8%, both beating on favorable mix and COGS. This aligns with a longer-term outlook on the durability of Lilly’s profitability as the incretin franchise scales.
2026 Guidance Raised Again
Management lifted full-year 2026 revenue guidance to $85–87 billion (from $82–85 billion previously). The new midpoint of $86.0 billion represents a $2.5 billion raise and follows a $2 billion increase after the first quarter.
EPS guidance including IPR&D is now $35.50–$36.50 (narrowed from $35.50–$37.00). The midpoint of EPS guidance excluding IPR&D sits at $39.03, up $2.78. Performance margin guidance was also raised to 49.0%–50.5% (from 47.0%–48.5%) on the higher revenue base. The tax rate outlook remains unchanged at roughly 18–19%.
Mounjaro and Zepbound Continue to Lead
Combined worldwide sales of Mounjaro and Zepbound reached approximately $14.9 billion, up from $12.8 billion in the first quarter and ahead of both wall street ($13.7 billion) and consensus ($13.5 billion) estimates.
- Mounjaro: $9.9 billion ($4.8 billion U.S. / $5.2 billion rest of world)
- Zepbound: $4.9 billion
In the U.S., Lilly held incretin TRx share at 60.9% (Novo Nordisk at 38.8%) even as the overall market grew 31% year-over-year. Injectables still account for about 75% of new U.S. starts. The self-pay channel remains important, representing 45% of total Zepbound scripts and 55% of new ones.
Internationally, Lilly’s incretin share rose 2 points to 55% (versus Novo at 45%), helped by China (NRDL inclusion), Korea, Germany, the UK, and Mexico. Growth continued in India and Brazil despite the entry of generic semaglutide. Management noted that roughly 1 in 8 people in the U.S. and 1 in 50 outside the U.S. are now on a branded GLP-1.
Foundayo Launch Gaining Traction
Foundayo’s second-quarter worldwide sales of $98 million (including $67 million in the U.S.) came in roughly in line with consensus ($101 million) and well ahead of a popular $42 million estimate. Results included an estimated $20–30 million of U.S. inventory.
Lilly now has access at all major PBMs (as of June) and has begun direct-to-consumer promotion. Foundayo is capturing 25% of new oral starts, and the prescriber base expanded to 36,000 from 8,000 in the first quarter. Management highlighted a late-July inflection after the Medicare Bridge program launched, with volume nearly doubling month-over-month—an encouraging early signal.
Outside the U.S., sales came primarily from the UAE ($31 million, including some inventory) following the May launch. Near-term launches are expected in Saudi Arabia (obesity) and Mexico (obesity + type 2 diabetes), with more than 40 additional markets under review and a broader global rollout targeted for 2027. The U.S. type 2 diabetes submission is complete, with a decision expected later this year.
Medicare GLP-1 Bridge Program: Early Positive Signals
The Medicare Bridge program launched July 1, offering coverage to roughly 20 million eligible Americans at $50 per month. Lilly estimates this expands U.S. covered lives for its obesity portfolio by about 35%.
Early feedback has been constructive: approximately 60–70% of Bridge patients are new to incretin therapy. Management believes the program contributed to the late-July inflection seen in both Zepbound KwikPen and Foundayo, though injectables are still capturing roughly 80% of Bridge patients treated so far. The company continues broad education efforts across consumers, physicians, and pharmacies, and has enabled LillyDirect to fulfill prescriptions.
Pipeline Updates
On the diabesity front, Lilly is advancing several next-generation assets:
- Retatrutide (GLP-1/GIP/glucagon): The company is pursuing a BLA filing, though timing depends on the outcome of ongoing litigation. The current target is a first-quarter 2027 submission, supported by the TRIUMPH trials in obesity, obstructive sleep apnea, and knee osteoarthritis pain.
- Brenipatide (GLP-1/GIP): Two Phase 2 trials in IBS (RENEW-IBS-C and RENEW-IBS-D) have been initiated, with readouts expected in 2027. The rationale draws on the biology of gut-brain communication.
Bottom Line
Lilly’s second quarter delivered another beat-and-raise result, powered by Mounjaro and Zepbound, with early signs of acceleration from Foundayo and the Medicare Bridge program. Strong margins, rising international share, and continued pipeline progress support our positive outlook on the company’s GLP-1 franchise and the long-term growth of the global obesity market.
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