Eli Lilly and Company Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Revenue Growth: In 2025, full-year revenue surged 45% to $65.2 billion, driven by key products like Mounjaro, Zepbound, etc.
• Pipeline Progress: Launched new medicines, secured new indications, had positive clinical data in over 25 phase three trials, started 14 new phase three programs, and completed significant business development transactions.
• Manufacturing Expansion: Announced plans to build new manufacturing sites in the US and Europe, increased manufacturing capacity, and exceeded the incretin dose production goal for 2025.
• Patient Access: An agreement with the US government to provide obesity medications at $50 per month out of pocket, and the US direct-to-patient platform reached 1 million patients in 2025.
• AI and Collaboration: Collaborated with NVIDIA to open a co-innovation AI lab for accelerating drug discovery.

Segment Performance

• Cardiometabolic Health: Zepbound and Mounjaro are key products. Zepbound's revenue more than doubled in Q4 2025 compared to Q4 2024, making up one-third of new patient starts in obesity medications. Mounjaro is the market leader in the US type two diabetes incretin market, holding over 55% of new prescriptions.
• Immunology: Eblis showed solid performance in atopic dermatitis, Omvo's global revenue increased by 55%, and Jayperca's global sales grew by 30%.
• Neuroscience: Kisanlo became the US market leader in the amyloid-targeting therapy space, capturing over 50% of total prescriptions, with revenue reaching $109 million.
• Oncology: Pirtobrutinib received full approval with an expanded indication, and Verzenio's global sales grew by 3%, though market penetration plateaued in the US.

Guidance

• Revenue: Anticipates revenue between $80 billion and $83 billion in 2026, with the midpoint representing a 25% increase from 2025.
• Margin: Expect non-GAAP performance margin to be between 46% and 47.5%.
• Price Impact: Price is expected to be a drag in the low to mid-teens, affected by government access agreements, Zepbound pricing, and Medicaid price changes.
• Product Launches: Orforglipron is expected to launch in the US in 2026, and Medicare access to obesity medications is effective no later than July 1, 2026.

Risks

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

Question and Answer

• Q: Characterize good product launch metrics for orforglipron A: Kenneth Custer mentioned market expansion, patient satisfaction, and real-world efficacy as key metrics to track.
• Q: OUS regulatory approval timelines for orforglipron A: Patrik Jonsson stated that orforglipron will mainly launch in 2027, with a few markets like the UAE launching in late 2026 referencing FDA approval.
• Q: International Mounjaro ramp A: Patrik Jonsson noted Q4 2025 was strong, with 2026 growth building on that base, focusing on market expansion for chronic weight management and reimbursement for type two diabetes.
• Q: Attacking immunology broadly A: Daniel Skovronsky said proceeds from obesity are reinvested to accelerate growth in immunology, with ongoing trials and combination therapies in the works.
• Q: Medicare volume ramp and commercial opt-in A: Lucas Montarce said Medicare access is effective July 1, 2026, with a bolus of patients moving to Medicare, and Ilya Yuffa discussed employer opt-in with ongoing conversations for coverage.
• Q: Combination therapies in immunology A: Anne White mentioned trials with Taltz and Zepbound, Omvo and Zepbound in IBD, and brenepatide for asthma as ongoing combination efforts.
• Q: Pricing dynamics and cash pay A: Ilya Yuffa talked about contracting, direct-to-patient pricing, and positive uptake in the oral obesity medication market.
• Q: Importance of obesity-related indications A: Ilya Yuffa and Kenneth Custer discussed comorbidities, coverage for multiple aspects of obesity, and exploring new indications like stress urinary incontinence.
• Q: Cash pay dynamics and share retention A: Patrik Jonsson and Ilya Yuffa emphasized consumer centricity, Lilly Direct platform, and evolving consumer experience to drive share retention.
• Q: Oloralintide and tolerability A: Kenneth Custer mentioned oloralintide's strong weight loss results with excellent tolerability, and exploring combinations with other mechanisms of action.
• Q: CMS obesity demonstration vs insulin Part D model A: David Ricks compared with the insulin model, highlighting low out-of-pocket costs, consistent variance, and open access to all innovators, with potential cost savings for Medicare.
• Q: 2026 revenue guidance and orforglipron A: Lucas Montarce talked about bottom-up guidance, price erosion, and orforglipron's market expansion potential.
• Q: Consumer analogs for weight loss products A: David Ricks discussed the unique nature of the weight loss product market, with learnings from other industries and Lilly Direct platform's role in unlocking potential.
• Q: Orforglipron launch expectations A: Ilya Yuffa talked about the market expansive nature, scale direct-to-consumer platform, and expectations for new patient uptake with orforglipron's launch