Eli Lilly and Company Q3 FY2025 earnings call

• Financial Results: Q3 revenue grew 54% y/y. Gross margin was 83.6%, up 1.4 percentage points y/y. R&D expenses increased 27%, marketing, selling, and administrative expenses up 31%, non-GAAP performance margin 48.3%.
• Pipeline Milestones: U.S. FDA approval of Inluriyo for ER+, HER2-, ESR1-mutated advanced or metastatic breast cancer; EU approval of Kisunla for early symptomatic Alzheimer's disease; positive Phase III results for Jaypirca in naive CLL, Verzenio in high-risk early breast cancer, and orforglipron in obesity and type 2 diabetes.
• Manufacturing Expansion: Plans to build 2 new U.S. facilities and expand an existing facility in Puerto Rico to support API and small molecule portfolios.
• Dividends and Repurchases: Distributed $1.3 billion in dividends and executed approximately $700 million in share repurchases.

In Q3, Eli Lilly's segments showed strong performance. In immunology, EBGLYSS had U.S. total prescriptions for atopic dermatitis increase 41% compared to Q2 2025, with over 50% of new patients in the first-line setting, and Omvoh continued steady uptake with long-term safety/efficacy data in ulcerative colitis. Oncology saw Jaypirca build momentum and Verzenio as the market leader in the U.S. for node-positive, high-risk early breast cancer. Neuroscience's Kisunla total prescriptions grew 50% compared to Q2 2025, with EU marketing authorization received. In cardiometabolic health, Zepbound and Mounjaro had robust global performance. Mounjaro launched in 55 countries, with 75% of revenue outside the U.S. from obesity patients paying out of pocket. Zepbound prescription tripled in the U.S. Q3 2025, and Mounjaro gained share in the U.S. incretin analog market, with approximately 2 out of 3 new prescriptions in that market being Lilly medicines.

Based on strong performance and favorable foreign exchange rates, Lilly raised the midpoint of its revenue range to between $63 billion and $63.5 billion for full-year 2025. Non-GAAP earnings per share outlook was increased to $23 to $23.70.

Actual results could differ materially from projections due to several factors, including those listed in Lilly's latest Form 10-K and subsequent SEC filings.

Q: Congrats on the quarter. A lot of focus obviously on orforglipron and path to market. I was surprised that it wasn't on the first list of the Commissioner's National Priority Review Voucher program. And so maybe you could just comment on kind of if you guys are seeking that voucher? And then if not, why not? And then how to think about time lines for launch and some of the puts and takes as we think about maybe consensus expectations for 2026.

A: Thanks, Terence, for the call. We're interested in getting orforglipron to as many patients around the world as fast as we can, including those in the U.S. So without commenting on specific vehicles, I think investors can expect us to be pursuing in all of the above strategy to get the medicine out more quickly. Also, I'd point out that if you look at this new voucher program, I think orforglipron checks, at least 3 or 4 of the boxes laid out. So yes, we'll see. It's obviously government decision about which pathway they choose and the review time itself. But we're focused on speed here and we're ready to launch. So the package will go in, in the quarter, and we hope to get approval as soon as we can after that.

Q: I just wanted to touch base a bit more on the Mounjaro international ramp. It's obviously had a pretty impressive step up in sales these past 2 quarters. Can you just elaborate a little bit more on how some of these new country launches are trending relative to your expectations? How to think about growth off of this new higher base? And is just there any meaningful stocking as we appreciate kind of look at these numbers? Just a little bit more color on what's been driving this big step-up.

A: Thank you very much, Chris. I think we are very encouraged by what we're seeing outside of the U.S. And the business, as we shared earlier, is 75% out-of-pocket and 25% type 2 diabetes. What we have seen is, of course, an initial stocking in those markets where we launched, and we refer to the big ones being in Q2 being China, Brazil, Mexico and India. Since then, we have seen a lift in the performance also in those markets in Q3 and a continued very strong performance globally. Looking forward, I think the major opportunity is, number one, in type 2. We have reimbursement currently in 8 markets, and we'll continue those efforts across all of the U.S. markets, but that's going to take some time. Secondly, the big opportunity when it comes to obesity is really about patient activation, and we will lean in on all of those efforts also in 2026. When you look at international, it's important to -- while it's one line in the income statement, we are referring to more than 55 countries and there are different market dynamics, different buying patterns. So as we have seen over the last several quarters, it's not going to be a straight line, but there are significant opportunities outside of the U.S. also moving forward across type 2 and chronic weight management.