ELI LILLY & Co Q3 FY2026 earnings call

• Financial Execution: Delivered industry-leading results with 39% revenue growth. Raised full-year guidance due to stronger-than-expected performance across all therapeutic areas and geographies.
• Medicare GLP-1 Bridge Program: Launched on July 1, exceeding expectations with over 500,000 prescriptions filled. Approximately 75% of participants chose injectable therapy, and 7 out of 10 chose a Lilly product. The program is driving significant access expansion for seniors.
• Product Launches: Global rollout of oral obesity medicine Fondueo continues, launching in the UK, Mexico, Saudi Arabia, and UAE. Regulatory review ongoing in 40+ additional countries. U.S. launch showing strong early adoption, with Fondueo capturing ~40% of new patient starts in the oral segment.
• Pipeline Advancements: Retatrutide demonstrated superior weight loss (>20%) and glycemic control vs. semaglutide in Phase 3. Allora TZP showed promising dual/triple agonist data. Approved weekly basal insulin Onsweek and new indications for several oncology drugs.
• Manufacturing Expansion: Broke ground on two new facilities: a $6.5 billion plant in Houston, Texas, and a $5 billion plant in Richmond, Virginia, to support long-term supply needs.
• Business Development: Acquired Atai Beckley (neuroplastogens) and Merida Biosciences (precision immunology). Added eight new late-stage oncology programs.
• Leadership Transition: Patrick Johnson retiring as President of Lilly International; Ilya Yuffa assuming expanded role as President of Lilly Global Markets.

• Cardiometabolic Health: Revenue exceeded $16 billion, driven by Mounjaro and Zepbound. This segment contributed the majority of the company's growth, with combined revenue increasing by approximately $6 billion year-over-year. Zepbound prescriptions grew 82% in the U.S., capturing over 70% of injectable GLP-1 prescriptions.
• Oncology: Revenue doubled compared to Q3 2025. Key products included Javlor (Jakafi) and Ilurio (Imbruvica), which showed strong uptake in metastatic breast cancer and CLL/SLL markets. The oncology portfolio benefited from new FDA approvals and indications.
• Immunology: Worldwide revenue for Olumiant grew 59%. It gained share in the specialty dermatology market and is the fastest-growing medicine in atopic dermatitis.
• Neuroscience: Kisunla revenue grew 175%, maintaining leadership in amyloid-targeting therapies. Diagnostic testing momentum increased, with beta-217 blood tests more than doubling.
• Geographic Performance: U.S. revenue grew 34%; Europe grew 29%; Japan grew 26%; China grew 62% (Mounjaro became the first medicine in China to exceed $1 billion in its first full year); Rest of World grew 87%.

• Full-Year 2026 Revenue: Raised to between $91 billion and $92 billion, reflecting strength in U.S. volume (driven by Medicare Bridge) and international Mounjaro performance.
• Non-GAAP Performance Margin: Expected to be between 52% and 52.5%.
• Non-GAAP EPS: Expected to be between $35 and $36 per share.
• 2027 Outlook Highlights: Management anticipates sustained volume growth in incretins and full-year impact of the Medicare Bridge program. Fondueo launches in T2D are expected to drive further growth. Net realized prices remain a headwind but are expected to be offset by volume. Note that 2025 revenue benefited from ~$2 billion in one-time items not expected to recur.

• Pricing Pressure: U.S. net realized prices declined 7% overall (10% excluding rebate adjustments). Continued price erosion is expected to persist as a headwind, particularly in commercial segments where employer opt-outs may increase.
• Regulatory and Reimbursement Uncertainty: While the Medicare Bridge program is performing well, its long-term sustainability depends on CMS analysis and potential legislative shifts. Type 2 diabetes reimbursement for Fondueo outside the U.S. remains a challenge.
• Operational Complexity: Managing the rapid scale-up of manufacturing and global launches for multiple new products (Fondueo, Retatrutide) presents execution risks.
• Competition: Increasing competition in oral obesity treatments (e.g., Gobi) and established players in other therapeutic areas.

Q: Analyst asked if the massive guidance raise reflects a fundamentally larger incretin opportunity or demand pull-forward.

A: CFO stated they are still scratching the surface, noting only 1 in 10 patients are reached in the U.S. They view the runway as multi-year, driven by expanding addressable populations and new products like Fondueo, rather than just pull-forward. Growth in oncology/immunology/neuroscience also doubles year-over-year, confirming broad strength.

Q: Analyst asked about persistency data for Truzepatide/Zepbound and expectations for oral adherence.

A: President of USA reported Zepbound adherence matches historical standards (~16-18 months), even in self-pay. Oral medications typically show lower adherence than injectables. However, the Medicare Bridge program’s low out-of-pocket costs have improved adherence friction, leading to better persistence in that specific channel.

Q: Analyst asked about the future of the Alzheimer’s franchise, specifically Trailblazer 3 (TB3) and prevention opportunities.

A: President of Neuroscience highlighted Kizunla’s growth driven by convenience and diagnostic expansion via blood biomarkers (PTAL 217). TB3 aims to prevent progression in cognitively unimpaired individuals. Positive results could significantly expand the market to earlier stages, leveraging biomarkers for early diagnosis in primary care.

Q: Analyst asked about the strategic priorities beyond cardiometabolic health for building the next multibillion-dollar pillar.

A: Chief Scientific Officer emphasized equal focus on Oncology, Neuroscience, and Immunology. Oncology has 8 late-stage programs (e.g., myeloma acquisition). Neuroscience addresses large unmet needs via acquisitions (Atai-Beckley). Immunology aims for breakthrough efficacy via immune-reset technologies (Merida acquisition), suggesting diversified growth drivers beyond GLP-1s.

Q: Analyst asked about confidence in the Medicare Bridge program’s extension beyond 2027 and conversations with CMS.

A: CEO expressed optimism based on three factors: strong on-label uptake among high-BMI/comorbid seniors, cost-effectiveness estimates (USC study predicts $20B savings), and administrative energy to continue. He expects the program to shift into Part D coverage for 2028, ensuring continued access.