Eli Lilly raises 2025 revenue guidance to $60B-$62B while expanding GLP-1 pipeline and production

Earnings Call Insights: Eli Lilly and Company (LLY) Q2 2025

Management View

• CEO David A. Ricks highlighted a strong quarter, stating, “Q2 was a strong quarter. We delivered robust revenue growth, shared top line clinical data from multiple Phase III programs and invested in several initiatives that will support our future growth.” Ricks announced positive top-line data from the ATTAIN-1 orforglipron trial, with patients on the highest dose losing more than 27 pounds, or 12.4% of their body weight. He emphasized, “Our goal from the beginning was to create a medicine that has a clinical profile consistent with approved GLP-1 while offering the convenience of a once-daily pill and the production flexibility of small molecule chemistry to meet global demand.”
• Ricks also described recent milestones: “We achieved several key milestones since our last earnings call. These include the U.S. FDA approval of a new dosing schedule for Kisunla, the positive European CHMP opinion for Kisunla, and announced positive results in the SURPASS-CVOT Phase III trial for tirzepatide in people with type 2 diabetes and heart disease.”
• The company completed the acquisitions of SiteOne Therapeutics and Verve Therapeutics, adding to the pain and cardiovascular disease portfolios respectively.
• Ricks addressed drug pricing reform, noting, “At Lilly, we’ve already implemented several initiatives, which directly lower patient costs for our most commonly used medicines.”
• CFO Lucas E. Montarce stated, “Revenue grew 38% compared to Q2 2024, driven by our key products. Gross margin as a percentage of revenue was 85% in Q2, an increase of 3 percentage points versus the same quarter last year.” Montarce further reported, “Earnings per share increased 61% to $6.31, including of a negative impact of $0.14 from acquired IPR&D charges.”

Outlook

• Montarce announced, “We are increasing the bottom and the top end of the revenue range as well as our expectation for performance margins and earnings per share. We now anticipate our revenue will be between $60 billion and $62 billion.” Non-GAAP earnings per share guidance was raised to $21.75 to $23, with performance margin expected between 43% and 45.5% of revenue.
• The company expects to produce at least 1.8x the number of salable incretin doses in the second half of 2025 compared to the same period in 2024.
• Management indicated the 2025 impact of currently announced tariffs will be modest and factored into guidance.

Financial Results

• Revenue increased 38% year-over-year, with growth attributed to products including Ebglyss, Jaypirca, Kisunla, Mounjaro, Omvoh, Verzenio, and Zepbound.
• Gross margin reached 85%, up 3 percentage points from the prior year, driven by improved production costs and product mix, partially offset by lower realized prices.
• Non-GAAP performance margin was 45.9%. The effective tax rate was 16.5%.
• U.S. revenue growth was driven by Zepbound and Mounjaro, though partially offset by an 8% price decline. European revenue grew 77% in constant currency, while Japan and China also saw strong Mounjaro-driven growth.
• Mounjaro posted $5.2 billion in global sales and became the U.S. market leader in total type 2 diabetes incretin prescriptions. Zepbound contributed $3.4 billion in sales and continues to lead the U.S. branded anti-obesity market.

Q&A

• Christopher Thomas Schott, JPMorgan: Asked about orforglipron’s weight loss profile versus competitors. Kenneth L. Custer responded that orforglipron offers “27 pounds of weight loss from a single pill and also get really encouraging effects on other important biomarkers… Now you’re getting that all from a single oral pill, but we can manufacture at scale.”
• Seamus Christopher Fernandez, Guggenheim: Probed on pricing environment and compounding. Ricks stated, “We’ve always had a philosophy across all medicines, including with incretins, to price to value.”
• Geoffrey Christopher Meacham, Citibank: Sought detail on GI adverse event rates for orforglipron. Daniel M. Skovronsky explained, “The GI profile was as expected for a GLP-1 agonist… most of the side effects occur early… and then they go down over time.”
• Timothy Minton Anderson, BofA Securities: Inquired about Canadian generics’ impact. Ilya Yuffa said, “We’re seeing that our offering with the vial with Zepbound and the profile… is meeting a need for patients even in the context of noise, whether you have compounded or sema in the market.”
• David Reed Risinger, Leerink Partners: Asked about U.S. employer coverage for anti-obesity medicines. Yuffa reported employer opt-in coverage has been steady around 50% to 55% and expects new benefit designs to increase opt-in over time.
• Terence C. Flynn, Morgan Stanley: Questioned expectations for upcoming orforglipron trials. Custer stated, “We expect similarly encouraging results” and are preparing for regulatory submission by year-end.
• Additional analyst questions covered topics including side effect profiles, gender split in trials, LillyDirect’s evolution, channel dynamics, discontinuation rates, pricing parity between the U.S. and Europe, and the cash pay channel strategy.

Sentiment Analysis

• Analyst tone was probing and, at times, skeptical regarding orforglipron’s competitive efficacy and pricing dynamics, while seeking clarity on Zepbound’s market response to PBM decisions and channel evolution.
• Management maintained a confident and constructive tone throughout, emphasizing strong results, robust pipeline progress, and readiness to address policy and market access challenges. Quotes such as “We are very pleased with what we disclosed this morning” and “We remain confident in the long-term growth outlook for Zepbound” reflect this confidence.
• Compared to the previous quarter, analysts’ skepticism about orforglipron’s weight loss profile and competitive positioning appeared to increase. Management’s tone on pricing and market access was more defensive in response to persistent questions about PBM dynamics and price erosion.

Quarter-over-Quarter Comparison

• Guidance was raised this quarter, with revenue and EPS projections increased, while in Q1 guidance was reaffirmed.
• The company reported continued market share gains for Mounjaro and Zepbound, with Mounjaro reaching U.S. market leadership, up from strong Q1 growth.
• Manufacturing capacity expansion accelerated, with explicit figures for production increases and new facility plans in Q2.
• Q2 featured more discussion of PBM formulary headwinds, especially regarding the CVS decision’s impact on Zepbound, whereas Q1 acknowledged such risks but described the impact as limited.
• Analyst focus shifted from broad product launches and pipeline milestones in Q1 to more pointed questions about competitive dynamics, PBM access, and orforglipron’s real-world positioning in Q2.
• Management confidence in orforglipron’s potential was consistent, though the Q2 call saw more direct challenges to its efficacy data versus competitors.

Risks and Concerns

• Management cited ongoing price declines, with U.S. revenue growth partially offset by an 8% price decline and expectations for continued single-digit net price erosion.
• The exclusion of Zepbound from CVS’s template formulary was identified as a significant headwind for prescription growth in Q3.
• Regulatory and policy risks around drug pricing reform remain, with management warning that imposing foreign price controls on the U.S. market “risks embracing the worst of 2 worlds” and could harm innovation.
• Analyst concerns included the impact of potential Canadian generics, discontinuation rates in orforglipron trials, and the sustainability of employer opt-in rates for anti-obesity coverage.

Final Takeaway

Eli Lilly management emphasized another quarter of robust revenue growth and clinical milestones, highlighted by strong performances from Mounjaro and Zepbound, the advancement of orforglipron as an oral GLP-1, and an increase in 2025 revenue and earnings guidance. The company is scaling manufacturing capacity and navigating pricing and access challenges while maintaining confidence in the long-term growth trajectory of its key products and pipeline. Management reiterated a commitment to patient access, innovation, and disciplined execution as the company works to sustain momentum into the second half of 2025.

Read the full Earnings Call Transcript