Eli Lilly 2Q26 earnings: GLP-1 dominance holds despite slow Foundayo launch

• Eli Lilly delivered a strong 2Q26, with revenue rising 48% YoY to USD 23.0 billion and EPS exceeding consensus by around 40%.

• Mounjaro sales surged 91% YoY to USD 9.9 billion, reinforcing Lilly’s leadership in the fast-growing GLP-1 market despite rising competition.

• Foundayo’s slower launch remains a key focus, but prescription momentum accelerated in late July as access and affordability improved.

• Strong growth across immunology, oncology and neuroscience strengthens Lilly’s portfolio diversification, helping reduce reliance on its core cardiometabolic franchise over the long term.

• We raised Lilly’s target price to USD 1,390 as stronger GLP-1 demand supports earnings upgrades, although upside potential has narrowed after the share price rally.

2Q26 earnings highlight

Eli Lilly delivered a strong quarter, with revenue rising 48% year-on-year (YoY) to USD 23.0 billion, well above the consensus estimate of USD 20.6 billion. Growth was driven by a 60% increase in sales volume, partially offset by a 13% decline in realised prices.

Sales of Mounjaro increased 91% YoY to USD 9.9 billion, exceeding consensus estimates of USD 8.8 billion. Zepbound generated revenue of USD 4.9 billion, up 46% YoY and ahead of consensus expectations of USD 4.6 billion. Lilly's newly launched oral GLP-1 pill, Foundayo, contributed USD 98 million in second-quarter sales following its April launch, surpassing consensus estimates of USD 92 million.

Lilly's broader portfolio also delivered strong growth, with revenue from key products across its Immunology, Oncology and Neuroscience segments increasing 121% YoY.

Non-GAAP gross margin expanded by 1.3 percentage points to 86.3%, primarily driven by improved manufacturing costs and a favourable product mix, partially offset by lower realised prices.

Non-GAAP diluted earnings per share (EPS) rose 33% YoY to USD 8.38, beating the consensus estimate of USD 6.00 by around 40%.

Reflecting the strong quarter, management raised its full-year 2026 revenue guidance from USD 82.0–85.0 billion to USD 85.0–87.0 billion. Non-GAAP EPS guidance, however, was trimmed at the upper end, from USD 35.5–37.0 to USD 35.5–36.5. This reflects management's USD 2.78 increase to the midpoint of underlying non-GAAP EPS guidance being more than offset by USD 3.03 per share of acquired in-process research and development (IPR&D) charges, primarily related to the acquisitions of Orna Therapeutics, Inc. and Ajax Therapeutics, Inc.

Table 1: Eli Lilly’s 2Q26 financial highlights

	2Q25	2Q26	Beat/Miss vs Estimate	YoY change
Revenue	15,558	22,974	11.6%	47.7%
Gross Margin	85.0%	86.3%	3.5%	+1.3pts
Operating Income	6,989	9,806	37.5%	40.3%
Net Income	5,679	7,493	38.6%	31.9%
Diluted EPS	6.31	8.38	39.6%	32.8%
Source: Eli Lilly 2Q Earnings Presentation, Bloomberg. Data as of 30 June 2026. Figures are in USD millions except percentages and per share amounts and reflect non-GAAP numbers.

Table 2: Strong growth of key products

Key Product Revenues	2Q25	2Q26	Year-over-Year Change
Mounjaro	5,199	9,943	91%
Zepbound	3,381	4,928	46%
Jaypirca	123	192	56%
Ebglyss	87	201	131%
Kisunla	49	167	NM
Omvoh	75	102	36%
Inluriyo	-	35	NM
Foundayo	-	98	NM
Total Revenue (All Products)	15,558	22,974	48%
Source: Eli Lilly 2Q Press Release. Data as of 30 June 2026. Figures are in USD millions except percentages.

Strong demand for GLP-1 drugs to continue driving Lilly’s growth

Foundayo sales were closely watched by investors, as the obesity pill's launch had trailed Novo Nordisk's oral Wegovy. For the second quarter, Lilly reported USD 98 million in Foundayo sales — ahead of consensus estimates, but still well behind the 3.22 billion Danish kroner (approximately USD 497 million) generated by oral Wegovy over the same period.

That said, there are early signs that momentum is turning. Management pointed to a clear inflection point in late July, when prescription volumes nearly doubled within a month and new patient starts climbed to roughly one in four. This acceleration coincided with a broader push to expand access and awareness: CVS Caremark, one of the largest pharmacy benefit managers in the US, added Foundayo to its covered formulary in June, improving affordability and access for patients. Foundayo also became eligible for coverage under the new Medicare GLP-1 Bridge program, a temporary federal initiative that took effect on 1 July and allows eligible Medicare beneficiaries to access select GLP-1 drugs for obesity at a flat USD 50 monthly copay. Alongside these access gains, Lilly rolled out a full direct-to-consumer marketing campaign to build physician and patient awareness.

International expansion should provide a further tailwind to growth. Foundayo has already launched in the UAE for obesity and recently received approval in Saudi Arabia for obesity and in Mexico for both obesity and type 2 diabetes. The drug is also under regulatory review in more than 40 additional countries, with Lilly having filed for the type 2 diabetes indication in several markets. Management expects most international launches to take place in 2027.

Taken together, rising physician and consumer awareness, improving access and affordability, and international rollout should support a further acceleration in Foundayo sales.

Despite Foundayo's slower initial launch, Lilly has maintained its leadership over Novo Nordisk and a growing field of earlier-stage competitors in the broader GLP-1 market. Its share of the US incretin analogue market — a class of drugs that mimic natural gut hormones to help regulate blood sugar and appetite — increased from 60.1% in 1Q26 to 60.9% in 2Q26, despite the launch of oral Wegovy, while its share of international markets rose from 53.2% to 54.9%. Mounjaro has also proven resilient in markets facing generic semaglutide competition. Management noted that Mounjaro prescriptions have continued to grow in India and Brazil even after generic entrants arrived, a resilience they attribute to Mounjaro's superior clinical differentiation and generic manufacturers' supply constraints.

To extend its lead, Lilly continues to invest in next-generation GLP-1 therapies. Retatrutide, its triple-acting incretin candidate, has now completed the clinical data package needed for global regulatory submissions across three indications — obesity, obstructive sleep apnea, and knee osteoarthritis pain — following positive Phase 3 results. Lilly plans to submit regulatory applications for Retratrutide to the US Food and Drug Administration (FDA) in the first quarter of 2027. If approved, it has the potential to become another multibillion-dollar blockbuster, further reinforcing Lilly's leadership in the fast-growing GLP-1 market.

Figure 1: Sales of Foundayo is gaining momentum after an initial slow start

Source: IQVIA data cited by Jefferies and Citi, Fierce Pharm. Data as of 31 July 2026.

Growth extends well beyond Lilly's GLP-1 franchise

Lilly's non-cardiometabolic franchises also delivered strong double-digit growth in the quarter, adding a degree of diversification even as Mounjaro and Zepbound accounted for roughly 64% of total revenue.

In immunology, Ebglyss sales more than doubled YoY to USD 201 million, with the drug continuing to gain share of new prescriptions in the US specialty dermatology market, up around 4 percentage points from a year ago.

In oncology, Inluriyo has gained traction rapidly, capturing more than 50% of new prescriptions in the US metastatic breast cancer oral SERD market after only two full quarters on the market.

In neuroscience, Kisunla continued to strengthen its lead in the US anti-amyloid therapy market, with revenue more than tripling YoY, aided by growing Alzheimer's diagnostic testing volumes.

Lilly is also advancing more than 40 active Phase III programs, underscoring the depth of its late-stage pipeline. The company is further leveraging strong cash flows from its obesity portfolio to expand into new therapeutic areas through acquisitions, with several deals completed or announced this year across neuroscience, infectious disease and other areas (Figure 2).

Together, these initiatives support long-term portfolio diversification and help mitigate the risk of future earnings concentration. In particular, they reduce Lilly's reliance on Mounjaro and Zepbound and help position the company to manage potential revenue pressure following eventual patent expirations in the next decade.

Figure 2: Recently completed and announced acquisitionsSource: Source: Eli Lilly 2Q Earnings Presentation. Data as of 5 August 2026.

Figure 3: Eli Lilly has a wide pipeline of drugs

Source: Eli Lilly 2Q Earnings Presentation. Data as of 3 August 2026.

Higher target price, but smaller upside potential

We have raised our earnings estimates to reflect stronger-than-expected Mounjaro and Zepbound sales, as lower prices and greater access continue to drive volume growth across Lilly's GLP-1 portfolio.

Accordingly, we have raised our target price for Eli Lilly slightly, from USD 1,348 to USD 1,390, implying an upside potential of 16.6% from the 6 August closing price of USD 1,191.94. This represents a smaller upside potential compared to our 18 June initiation report, as share prices have risen since then. That said, we see room for further upward revisions should Foundayo's sales momentum accelerate more rapidly than we currently expect.

Overall, we continue to favour the company for its market-leading incretin portfolio, the absence of any near-term loss-of-exclusivity risk, and its ongoing efforts to expand and diversify its drug pipeline.

Table 3: Projections for Eli Lilly earnings

Eli Lilly	2025	2026E	2027E	2028E
Earnings Per Share (EPS)	26.2	36.1	46.2	53.5
Earnings Growth YoY	72.4%	37.9%	28.2%	15.7%
PE Ratio (X)	41.1	33.1	25.8	22.3
Target Price (based on a fair PE of 26X)				1,390
Upside Potential				16.6%
Source: Bloomberg Finance L.P., iFAST Estimates. Data as of 6 August 2026

Figure 4: Share prices are driven by earnings growth in the long run

Declaration:

This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a NIL position in the abovementioned securities. The analyst who produced this report holds a position in Eli Lilly.