Eli Lilly and Co Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Eli Lilly and Company's Q3 2025 earnings call highlighted strong financial performance, pipeline advancements, and manufacturing expansion, with key discussions on Mounjaro and Zepbound's market performance, orforglipron's development, and strategic responses to competitor actions and PBM business model changes.
Key Financial Results
Q3 2025 revenue grew by 54% compared to Q3 2024.
Revenue from key products more than doubled.
Gross margin as a percentage of revenue was 83.6% in Q3, a 1.4 percentage point increase year-over-year.
Non-GAAP performance margin was 48.3%, an increase of more than 8 percentage points from Q3 2024.
Earnings per share (EPS) increased to $7.02, including $0.71 of acquired IPR&D charges, compared to $1.18 in Q3 2024, which included $3.08 of acquired IPR&D charges.
Increased full year revenue guidance to between $63 billion and $63.5 billion.
Increased outlook for non-GAAP earnings per share to $23 to $23.70.
Business Segment Results
US revenue increased 45% in Q3, driven by volume growth of Zepbound and Mounjaro, partially offset by a 15% price decline.
In Europe, revenue increased by over 100% in constant currency, reflecting strong uptake of Mounjaro.
Japan, China, and Rest of the World delivered constant currency revenue growth of 24%, 22%, and 51%, respectively, driven by Mounjaro volume growth.
Ebglyss prescriptions increased by 41% compared to Q2 2025.
Kisunla total prescriptions grew by 50% compared to Q2 2025.
Zepbound prescriptions tripled in Q3 2025 compared to the same period last year.
Mounjaro prescriptions grew by over 60% in the US.
Capital Allocation
Distributed $1.3 billion in dividends.
Executed approximately $700 million in share repurchases.
Industry Trends and Dynamics
Combined US incretin analog market growth was strong, increasing by 36% in Q3 compared to the same period in 2024.
Lilly incretins gained market share compared to Q2 2025, accounting for approximately two out of every three new prescriptions in the incretin analog market.
Discussion of the potential impact of the CVS template formulary change on Zepbound performance, noting a modest impact.
Mention of Cigna's move to replace drug rebates with GPO fees and its potential positive impact on innovators and patients.
Competitive Landscape
Lilly gained market share in the incretin analogs market for the fifth consecutive quarter in the US.
Lilly medicines account for nearly 6 out of 10 prescriptions within this class.
Mounjaro performance accelerated outside the US, driven by robust uptake around the world.
Discussion of competitive dynamics in the obesity market, including potential segmentation strategies for retatrutide and orforglipron.
Mention of Novo Nordisk's semaglutide and its negotiated price under the IRA, with potential implications for Lilly's pricing strategies.
Macroeconomic Environment
Favorable impact of foreign exchange rates on revenue.
Growth Opportunities and Strategies
Advancing the pipeline with 16 new Phase 3 programs initiated since the start of 2024.
Plans to build two new US facilities for active pharmaceutical ingredients and expand an existing facility in Puerto Rico.
Focus on speed to market for orforglipron, pursuing an "all-of-the-above" strategy.
Developing orforglipron in settings beyond obesity and diabetes, including osteoarthritis pain and stress urinary incontinence.
Exploring combination therapies with the potential to deliver differentiated efficacy, such as combining mirikizumab with tirzepatide in ulcerative colitis and Crohn's disease.
Focus on expanding access to medicines through direct-to-consumer platforms like LillyDirect.
Emphasis on clinical differentiation and value-based discussions with payers.
Financial Guidance and Outlook
Increased the midpoint of the revenue range by over $2 billion, now anticipating full-year revenue between $63 billion and $63.5 billion.
Expect non-GAAP performance margin to be between 45% and 46% of revenue.
Expect non-GAAP earnings per share of $23 to $23.70.
R&D Pipeline Update
US FDA approval for imlunestrant (Inluriyo) for HR-positive, HER2-negative, ESR1-mutated, advanced or metastatic breast cancer.
EU approval of Kisunla for early symptomatic Alzheimer's disease.
Positive results from a Phase 3 trial of Jaypirca in treatment of naïve CLL.
Positive overall survival data for Verzenio in high-risk early breast cancer.
Positive results from the second Phase 3 trial of orforglipron in obesity.
Positive results from three additional Phase 3 trials of orforglipron in type 2 diabetes.
Submission of insulin efsitora alfa in the US for treatment of type 2 diabetes.
Initiation of Phase 3 program in alcohol use disorder with brenipatide.
