Eli Lilly stock surges 6% after Q2 earnings beat driven by Mounjaro, Zepbound

Eli Lilly stock LLY gained 6% on Wednesday after delivering a stronger-than-expected second quarter as robust demand for its blockbuster GLP-1 medicines Mounjaro and Zepbound lifted revenue and profit well above Wall Street expectations.

This has prompted the drugmaker to raise its full-year revenue outlook.

The company reported adjusted earnings per share of $8.38, comfortably ahead of the FactSet consensus estimate of $6.01. 

Revenue climbed 48% year over year to nearly $23 billion, surpassing analysts' expectations of $20.7 billion.

The Indianapolis-based company now expects full-year revenue between $85 billion and $87 billion, compared with its previous forecast of $82 billion to $85 billion.

Analysts had been expecting revenue of about $85.3 billion.

While Lilly narrowed the upper end of its adjusted earnings guidance by 50 cents, it maintained a forecast of $35.50 to $36.50 per share for the year, remaining above analysts' expectations at the midpoint of the range.

Mounjaro and Zepbound continue to power growth

The company's diabetes and obesity treatments remained the primary drivers of growth during the quarter.

Mounjaro, Lilly's injectable treatment for type 2 diabetes, generated $9.9 billion in revenue, exceeding Wall Street expectations of approximately $8.8 billion to $8.9 billion.

Revenue from the drug nearly doubled compared with the same period last year, reinforcing its position as the world's best-selling medicine.

Zepbound, which contains the same active ingredient, tirzepatide, but is approved for chronic weight management, recorded $4.9 billion in sales.

The result topped analysts' expectations of roughly $4.6 billion to $4.7 billion and represented a 46% increase from a year earlier.

Lilly's GLP-1 portfolio, which includes Mounjaro, Zepbound and oral obesity treatment Foundayo, now accounts for about 65% of the company's total revenue.

Foundayo, launched in April, generated $98 million during its first full quarter on the market.

While the figure fell short of the FactSet consensus estimate of $103 million, the product marks Lilly's entry into the growing oral GLP-1 market, where it competes directly with Novo Nordisk.

"LLY crushes expectations," wrote RBC Capital Markets analyst Trung Huynh, describing the company's second-quarter performance to investors.

Acquisitions expand pipeline beyond obesity drugs

Alongside strong commercial execution, Lilly continued expanding its pipeline through acquisitions.

During the quarter, the company completed its acquisition of in vivo cell therapy developer Kelonia Therapeutics and finalized the purchase of Centessa Therapeutics in a deal valued at up to $7.8 billion, marking Lilly's largest completed acquisition to date.

After the quarter ended, Lilly also agreed to acquire psychedelic drug developer AtaiBeckley as it broadened its presence in mental health treatments. 

The company additionally completed three acquisitions aimed at building an infectious disease portfolio.

Lilly also disclosed an investment in Oura, the maker of health-tracking smart rings that has filed to go public.

Manufacturing investment and outlook remain in focus

The company continues to invest heavily in manufacturing capacity to support growing demand for its medicines.

In May, Lilly announced an additional $4.5 billion investment to expand manufacturing facilities across Indiana, increasing its total commitment in the state to more than $21 billion.

The company also strengthened commercial partnerships during the quarter, revamping an agreement with CVS Health aimed at improving patient access to Zepbound and Foundayo.

Lilly's performance contrasted with rival Novo Nordisk, whose latest quarterly results disappointed investors despite an improved annual outlook.

Looking ahead, Lilly plans to submit its next-generation weight-loss drug retatrutide to US regulators during the first quarter of 2027, targeting approval later that year or in early 2028. 

The company also expects continued demand for its existing portfolio to support further revenue growth after more than doubling sales since the second quarter of 2024.