Eli Lilly Raises 2026 Revenue Forecast to $92B on Zepbound Demand

Higher volume made up for lower prices

Eli Lilly's third quarter answered the main question hanging over the obesity-drug business this year: whether falling prices would slow growth. They did not. The Indianapolis drugmaker raised its 2026 revenue forecast to $91 billion to $92 billion, up from $85 billion to $87 billion, after third-quarter revenue rose 39% to $24.4 billion.12 Analysts polled by LSEG had expected about $22.61 billion in revenue, and adjusted earnings of $7.48 per share beat the $6.26 consensus.1 This is the third time Lilly has raised its outlook this year.27

Pricing is the key detail. Worldwide volume rose 53% while realized prices fell 15%.3 In the U.S., volume rose 41% and prices fell 7%, a drop Lilly tied mainly to Zepbound.1 Outside the U.S., volume rose 76% while prices fell 29%.1 The company said that steeper international decline came mostly from Mounjaro being added to China's National Reimbursement Drug List.612

The result is a company that is giving up price per patient in exchange for many more patients, and so far the trade is paying off. Revenue grew faster than the price cuts, and gross margin still improved. Lilly's CFO said on the call that margin rose 80 basis points to 84.4%, helped by product mix and lower production costs.24 One outlet put the margin at 83.9%8. The difference is probably a matter of how the figure was defined, but both versions show margin rising.

Two brands of one drug carry the company

Tirzepatide, sold as Mounjaro for diabetes and as Zepbound for obesity in the U.S., is doing most of the work. Mounjaro's worldwide revenue rose 65% to $10.72 billion, and its sales outside the U.S. rose 93%.1 Zepbound brought in $5.35 billion, up 49%, nearly all of it in the U.S.1 Both topped analyst estimates.5

One independent tally found the two brands accounted for 88% of Lilly's added revenue over the year and now make up about 66% of total sales, up from 57% a year earlier.7 That level of concentration is unusual for a company valued at about $1.2 trillion.5 It also explains why each Zepbound pricing decision or Medicare coverage rule now affects the whole company.

Lilly's lead over Novo Nordisk grew again. An earnings presentation put Lilly's share of the U.S. obesity and diabetes drug market at 63% in the quarter, against 36.6% for Novo.21 Executives said about 7 in 10 U.S. prescriptions for injectable incretin drugs were for a Lilly product.2124 U.S. prescriptions for obesity incretins rose 82% from a year earlier.24 Internationally, Lilly's share rose almost 4 percentage points from the second quarter to about 58%.23

Medicare pricing turned out to help demand

The U.S. drug-pricing story ran against most investor expectations. Reuters reported that investors had worried the $50-a-month price for Medicare patients would cut revenue faster than new patients could replace it.911 Lilly's Zepbound prices are already lower after a pricing deal with the Trump administration last year, and Medicare began covering GLP-1 drugs for weight loss in July under a temporary pilot.1

That pilot, known as the Bridge program, has become a source of growth. Lilly said more than half a million people have filled a prescription for one of its medicines through it since July 1.27 Lilly also said about 7 in 10 new Bridge patients start on a Lilly drug, and roughly 80% had never taken an incretin.23 That second figure matters because it suggests the program is bringing in new patients rather than moving existing ones to a cheaper price. Bernstein's figures were similar: about 70% of the roughly 700,000 Medicare patients who recently started a GLP-1.11 Federal officials said in early October that the program had about 1.1 million patients.19

The longer-term question is profit margins. Most of Lilly's sales outside insurance have gone through its $449-a-month cash-pay platform, so the size of government discounts will matter more over time.1216 Ricks told analysts that because obesity drugs are partly a consumer purchase, Lilly wants a much narrower range of prices across countries than drugmakers have usually set.26 That would be a notable change for an industry that has typically charged U.S. patients much more than patients elsewhere. It also fits the price declines Lilly is reporting both at home and abroad.

Investors should keep one caveat in mind. Lilly said about $900 million of the quarter's revenue came from one-time benefits, including $410 million in Jardiance milestone payments it expects to be the last, plus favorable changes to rebate and discount estimates.512 Some of the beat will not repeat. Even so, the new guidance implies $23.8 billion to $24.8 billion in fourth-quarter revenue, roughly in line with the quarter just reported.7

The obesity pill is behind its rival

The weak spot was Foundayo, Lilly's oral GLP-1 pill. It brought in $184 million, its second quarter of sales after its April launch.21 Every outlet called that a miss, but the estimates varied: about $217 million from LSEG, about $229 million from StreetAccount and FactSet, and $231 million in another consensus.122118 Against any of them, the pill fell short.

Lilly's argument for patience rests on where the pill is headed. The CFO said total U.S. Foundayo prescriptions and new patients both doubled from the prior quarter, and that about 4 in 10 patients starting an oral obesity drug choose Foundayo.21 Lilly expects U.S. approval for type 2 diabetes in the fourth quarter.21 Ricks noted that about half of U.S. GLP-1 volume is in diabetes.24

The harder issue for the pill is clinical. In separate studies, Novo's oral Wegovy produced about 14% weight loss over 64 weeks, compared with about 11% over 72 weeks for Foundayo.13 Novo's pill also launched in January, four months before Lilly's.28 BMO's Evan Seigerman said Foundayo "continues to lag" but that Lilly's broader strength makes this a smaller concern.12 That seems like the right reading. Novo has a real foothold in pills, but pills remain a small part of a market where Lilly dominates injections.

Cancer drugs grow, older brands slip

Lilly also made a point of growth outside obesity. Ricks said revenue from its newest products in oncology, immunology and neuroscience doubled.25 In cancer, the leukemia and lymphoma drug Jaypirca rose 59% to $228 million and was the fastest-growing BTK inhibitor in the U.S. by prescriptions.24 The breast cancer pill Inluriyo brought in $73 million.25 Executives said it held more than 60% of new U.S. prescriptions in the oral SERD class for metastatic breast cancer.24 The Alzheimer's drug Kisunla rose 175% to $193 million.

The older products tell a different story. Verzenio, Lilly's established breast cancer drug, grew 3% to $1.51 billion and missed consensus.22 The immunology drug Taltz fell 5%.22 In absolute dollars, the new cancer drugs are still small compared with tirzepatide. Diversification is real but early.

Lilly is also using its obesity profits on deals. Acquired research charges of $4.57 a share, mostly from the AtaiBeckley and Curevo acquisitions, caused it to lower adjusted EPS guidance to $35 to $36 even as revenue guidance rose.11 Lilly said the underlying business improved $4.07 a share at the midpoint before those charges.11 Ricks said three-quarters of Lilly's clinical pipeline targets diseases other than obesity.27

Where the coverage agrees and differs

Reports agree on the main numbers, the guidance raise and the Foundayo miss. They differ mostly on details. Zepbound growth was reported as both 48% and 49%.81 Reported share-price gains ranged from about 4% premarket to 8.6% at the open, with closing gains near 6.6% to 7%.1819151 EPS consensus figures ranged from $5.38 to $6.26 depending on the provider.221 None of these differences changes the overall picture.

The analysis offered by different outlets diverges more. Some coverage treats Lilly's cuts to realized prices as a deliberate strategy to widen access.14 Other coverage puts more weight on margin risk if Medicare and other payers gain bargaining power.1416 On the call, Ricks said Lilly had set conservative guidance on purpose, arguing that missing on the downside is worse than beating.23 He estimated that only 3% to 10% of eligible U.S. patients get obesity care.21

The best-supported reading is that the obesity market is still growing faster than prices are falling, and Lilly is capturing most of that growth. The risks to watch are reliance on a single molecule, Novo's lead in pills, and how far government pricing pushes margins down. Investors are already turning to retatrutide, Lilly's next-generation candidate, which produced about 24% average weight loss in mid-stage trials and is due for regulatory submission next year.12 Full 2027 guidance will come with fourth-quarter results.28