Eli Lilly & Co Earnings - Q1 2026 Analysis & Highlights
Eli Lilly reported strong Q1 2026 results driven by robust growth in its cardiometabolic portfolio, particularly Mounjaro and Zepbound, while advancing a comprehensive pipeline across immunology, oncology, and neuroscience with multiple positive Phase 3 trials and strategic acquisitions to expand its therapeutic capabilities.
Key Financial Results
Revenue grew 56% year-over-year to reach strong performance in Q1 2026, driven primarily by Zepbound and Mounjaro.
Gross margin was 82.6% of revenue, representing a decrease of approximately 1 percentage point versus Q1 2025, primarily driven by lower realized prices.
Non-GAAP performance margin was 50%, an increase of approximately 7 percentage points from Q1 2025 driven by revenue growth.
Non-GAAP earnings per share was $8.55, including acquired IPR&D charges of $0.52, compared to $3.34 in Q1 2025 inclusive of $1.72 of acquired IPR&D charges.
Key products revenue grew by more than $7 billion, with key products defined as Ebglyss, Inluriyo, Jaypirca, Kisunla, Mounjaro, Omvoh, and Zepbound.
Immunology, oncology and neuroscience medicines collectively grew by 160% compared to Q1 2025.
Business Segment Results
US revenue increased 43% in Q1 primarily driven by volume growth from Zepbound and Mounjaro as well as contributions from immunology, oncology, and neuroscience portfolio.
US price declined by 7%, including the impact of direct-to-patient prices for Zepbound, though this was partially offset by a one-time adjustment to estimates for rebates and discounts.
Europe revenue grew 37% in constant currency driven by sustained strong volume growth of Mounjaro.
Japan revenue grew 42% in constant currency driven by Mounjaro for type 2 diabetes.
China revenue growth accelerated with the inclusion of Mounjaro on the National Reimbursement Drug List for type 2 diabetes.
Rest of world revenue more than doubled in constant currency as Mounjaro achieved rapid share gains in Latin America and Asia.
Ebglyss US new patient starts increased by 90% compared to Q1 2025, with steady share gains within the specialty dermatology market.
Jaypirca worldwide sales grew 79% compared to Q1 2025, gathering additional momentum in the US from the expanded post-BTK indication in CLL.
Inluriyo achieved over 35% share of oral SERD new patient starts in metastatic breast cancer in Q1 during its first full quarter launch.
Kisunla continues to be the US leader in amyloid-targeting therapies, with the market steadily increasing as diagnostic capabilities for Alzheimer's disease expand.
Mounjaro and Zepbound combined global revenue was $12.8 billion, contributing $6.7 billion of growth compared to Q1 2025.
US incretin analog obesity market total prescriptions grew by over 80% in Q1, with Zepbound prescriptions growing at an even faster rate.
Zepbound self-pay accounted for approximately 45% of total prescriptions in Q1 and 55% of new prescriptions.
US type 2 diabetes incretin analog market total prescriptions grew 11% and Mounjaro gained another 3 percentage points of market share compared to end of 2025.
International incretin analog market increased by 77% since the same period last year as measured by IQVIA gross sales.
Lilly became the market leader outside the US in Q4 last year, with strong growth of Mounjaro in Brazil, UK, Korea, and China resulting in additional share of market gains in Q1 2026.
Capital Allocation
$1.5 billion in dividends distributed in the first quarter.
$2.4 billion in share repurchases executed in Q1 2026.
Four acquisitions announced: Orna Therapeutics for in vivo CAR-T pipeline to treat autoimmune diseases, Centessa Pharmaceuticals for medicines treating excessive daytime sleepiness and neurologic conditions, Kelonia Therapeutics for in vivo platform to treat multiple myeloma and other cancers, and Ajax Therapeutics for next-generation JAK inhibitors for blood cancers.
Acquisition of Ventyx Biosciences completed, bringing a pipeline of small molecule therapeutics including NLRP3 inhibitors designed to treat inflammation across a broad range of diseases.
Industry Trends and Dynamics
US incretin analog obesity market continued robust growth in Q1, with the recent approval of oral GLP-1s expanding the market and enabling more people to benefit from GLP-1s.
Total international incretin analog market has increased by 77% since the same period last year.
Generic semaglutide entry in India appears to be stimulating overall obesity market growth, with Mounjaro prescriptions approximately 10% higher in recent weeks compared to the period prior to generics entering.
Oral GLP-1s for obesity have not yet been introduced outside the US, with regulatory reviews ongoing in over 40 countries for obesity and type 2 diabetes.
Over 1 billion people around the world with obesity and related conditions can be helped by taking an incretin like Foundayo.
70% of adults have overweight or obesity and are potential candidates for obesity medications.
Low penetration of incretins outside of the US represents a significant opportunity for market growth.
Competitive Landscape
Pirtobrutinib (Jaypirca) was the first medicine to utilize and outperform a venetoclax-containing control arm in a Phase 3 trial in the history of CLL drug development.
Pirtobrutinib has been successful in four Phase 3 studies in CLL, each with compelling efficacy and safety, demonstrating efficacy as a monotherapy and in combination and head-to-head against chemo immunotherapy, a covalent BTK inhibitor and a venetoclax-based regimen.
Ebglyss is the first and only selective IL-13 inhibitor with positive Phase 3 data in children as young as six months old with moderate to severe atopic dermatitis.
Retatrutide can deliver glycemic control in line with the most widely prescribed incretin therapy for type 2 diabetes, tirzepatide, while delivering additional weight loss, with participants losing an average of 11.1 to 16.6 kilograms or 25 to 37 pounds.
Dual agonist trumps single agonist, as evidenced by Mounjaro pulling market share nicely despite generic semaglutide entry.
Lilly has market share above 53% outside the US for incretin analogs, with many international markets showing market share along the lines of what Lilly sees in the US with Zepbound.
Macroeconomic Environment
MFN (Most Favored Nation) pricing agreement negotiated with the Trump administration cut out-of-pocket costs for obesity medications.
Loss of Medicaid access in certain states had a negative impact on Q1 prescription growth in the high single digits for Zepbound.
Medicare GLP-1 Bridge program extended to provide access to obesity medicines to people with Medicare, beginning no later than July 1, 2026 and running through December 2027, with out-of-pocket costs capped at $50 per month.
Part D plans did not opt in at a certain rate for obesity medicine coverage, leading to the government extending the bridge program.
Growth Opportunities and Strategies
Foundayo (orforglipron) approved by US FDA for weight management, offering the benefits of GLP-1 therapy in a pill form that can be taken at any time of day without food or water restrictions.
Foundayo is the first time a new incretin medicine has been launched with obesity as its indication first.
Foundayo launch priorities include broad digital and traditional distribution availability, high levels of awareness with consumers, educating a broad group of HCPs, and building broad access in commercial, Medicare via the Bridge program, and later Medicaid access.
Foundayo submission planned for US type 2 diabetes later in Q2, with ACHIEVE-4 trial results showing cardiovascular safety and a lower risk of all-cause death in adults with type 2 diabetes and obesity.
Foundayo actively being studied in six Phase 3 programs in other diseases beyond obesity and diabetes.
Positive Phase 3 data announced for multiple pipeline programs: Jaypirca in combination with time limited regimen in adults with previously treated CLL, Ebglyss in pediatric atopic dermatitis, Taltz plus Zepbound in adults with psoriasis and obesity, retatrutide in adults with type 2 diabetes, and initiation of new Phase 3 programs for eloralintide, sofetabart mipitecan, and brenipatide.
Retatrutide (GIP/GLP-1 and glucagon triple agonist) showed profound improvements in hemoglobin A1C, with participants losing an average of 11.1 to 16.6 kilograms across doses.
TRIUMPH-1, an 80-week study of retatrutide in people with obesity, expected to read out later this quarter.
Three additional Phase 3 programs initiated for eloralintide in OA knee pain, obstructive sleep apnea and as an add-on therapy for obesity, in addition to ongoing Phase 3 obesity programs.
Eloralintide, a selective amylin receptor agonist (SARA), has shown a unique profile in Phase 2 trials with GLP-1-like weight loss and improved tolerability.
Ebglyss delivered durable disease control for up to four years with once monthly maintenance dosing in the ADlong Phase 3b open-label extension study.
Nearly all Ebglyss patients achieved meaningful skin improvements, with 75% achieving near complete skin clearance and 80% maintaining results without topical corticosteroids.
Ebglyss once every 8 weeks maintenance regimen currently under FDA review, with regulatory action expected later this year.
Ebglyss delivered positive outcomes for children as young as six months old with moderate to severe atopic dermatitis, with 63% achieving significant skin improvement as measured by EASI 75.
TOGETHER-PsO Phase 3b study showed 27% of participants on tirzepatide plus ixekizumab achieved total skin clearance and 10% or more weight loss compared to less than 6% on ixekizumab alone.
Additional ongoing Phase 3b combination trials studying mirikizumab plus tirzepatide in Crohn's disease and ulcerative colitis.
Brenipatide (GIP/GLP-1 dual agonist) Phase 3 program initiated in major depressive disorder to assess if it can delay time to relapse.
Phase 2 trials of brenipatide begun in opioid use disorder and schizophrenia, and Phase 2 trials initiated for two pain assets, a NAV 1.8 inhibitor and an AT2 receptor antagonist.
Centessa Pharmaceuticals acquisition will expand neuroscience portfolio into treating sleep disorders, with lead candidate cleminorexton demonstrating a potential best-in-class profile.
Lilly Employer Connect platform launched as a new way for employers to offer obesity management medicines to their employees.
Lilly Direct platform showing strong performance, with 55% of new patient starts for Zepbound coming through self-pay, most through Lilly Direct or telehealth players.
Foundayo early launch showing 80% of prescriptions are new to class, indicating market expansion rather than cannibalization.
Foundayo available on more than 12 major telehealth platforms and broadly available in pharmacies as of April 9.
Commercial access confirmed at two of the three largest US pharmacy benefit managers effectively mid-May for Foundayo.
42 active Phase 3 programs currently in development.
Market segmentation strategy for obesity medications to tailor medicines to different patient groups, including GLP-1 single agonists, dual agonists, oral medicines, and potential ultra long-acting options.
Retatrutide positioned for individuals seeking greater weight loss and across the spectrum of obesity.
Eloralintide positioned as a non-GLP-1 based mechanism for patients seeking alternative tolerability profiles or as an add-on to existing incretin therapies.
Financial Guidance and Outlook
Full year 2026 revenue guidance increased to between $82 billion and $85 billion, with the midpoint representing 28% growth compared to 2025.
Price expected to be a headwind in the low-to-mid teens for the full year.
Non-GAAP performance margin expected to be between 47% and 48.5%, driven by higher revenue.
Non-GAAP earnings per share guidance of $35.50 to $37, an increase of $2 to the top and bottom of prior guidance.
Tax rate remains unchanged from prior expectations.
Foundayo US type 2 diabetes submission planned for late Q2, with anticipation of regulatory action before the end of 2026.
Detailed TRANSCEND-T2D-1 results for retatrutide expected to be presented at the American Diabetes Association Scientific Sessions in June.
BRUIN CLL-322 results for pirtobrutinib planned to be submitted to regulators later this year.
Ebglyss pediatric atopic dermatitis data planned to be submitted to regulators later this year for potential label expansion.
European launches of Kisunla expected to begin contributing to growth throughout 2026.
Continued strong performance expected outside the US for Mounjaro, with patient activation key to drive sustainable growth.
Foundayo launch trajectory expected to accelerate in back half of 2026 as consumer awareness builds and access expands.
Medicare access for obesity medicines expected to have gradual impact in back half of 2026 and most likely incremental opt-ins for 2027 through Employer Connect.
Lilly Investment Community Update Day scheduled for Monday, December 7, with details on location and exact timing to follow.
