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DATE

Thursday, April 30, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — David A. Ricks
  • Chief Financial Officer — Lucas Montarce
  • President, Lilly Diabetes and Obesity — Patrik Jonsson
  • President, Lilly Neuroscience — Ilya Yuffa
  • Chief Scientific and Medical Officer — Daniel M. Skovronsky
  • President, Lilly Immunology — Kenneth L. Custer
  • Vice President, Investor Relations — Mike Czapar

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TAKEAWAYS

  • Revenue growth -- Revenue rose 56% compared to the first quarter of 2025 (calendar quarter ended March 31, 2025), driven by Zepbound and Mounjaro along with strength in all therapeutic areas and geographies.
  • Key product sales -- Eglis, Inlureo, Jaypirca, Kisunla, Mounjaro, Omvow, and Zepbound contributed more than $7 billion of incremental growth, with cardiometabolic products Mounjaro and Zepbound jointly generating $12.8 billion in global revenue.
  • International performance -- Mounjaro is now launched in over 55 countries, with a 60% estimated market share in Brazil and Korea, and achieved market leadership outside the US as the international incretin analog market expanded 77%.
  • US segment details -- US revenue increased 43%, primarily due to volume growth from Zepbound and Mounjaro; a 7% price decline, partly offset by a one-time rebate and discount adjustment, would otherwise have been a 10% price drop.
  • Gross margin -- Gross margin as a percentage of revenue was 82.6%, down by about 1 percentage point, driven mainly by lower list prices.
  • Expenses -- Marketing, selling, and administrative expenses grew 19%, and R&D costs expanded 28%, reflecting active investment in 42 ongoing Phase III programs.
  • Non-GAAP performance margin -- Non-GAAP performance margin rose to 50%, up approximately 7 percentage points compared to the first quarter of 2025 (calendar quarter ended March 31, 2025), tied to revenue growth.
  • Non-GAAP EPS -- Non-GAAP earnings per share reached $8.55, including acquired IPR&D charges of $0.52, versus $3.34 in the first quarter of 2025 (calendar quarter ended March 31, 2025), which included $1.72 of such charges.
  • Koundeo FDA approval -- Koundeo (orforgopron), a novel oral GLP-1 for obesity management, received US FDA approval and launched with broad pharmacy and digital platform availability starting April 9.
  • Koundeo early launch metrics -- Over 20,000 patients have been treated to date, 80% of whom are new to the GLP-1 class, with more than 8,000 prescribers thus far.
  • ACHIEVE-4 results -- Koundeo demonstrated a 16% lower risk of MACE-4 and a 23% lower risk of MACE-3 in type 2 diabetes patients compared to insulin glargine, with a reported 57% survival advantage in a preplanned, unadjusted analysis.
  • Pipeline progress -- Five positive Phase III trial results were reported, along with six new Phase III program initiations and acquisitions of Orna Therapeutics, Centessa Pharmaceuticals, Colonia Therapeutics, and Ajax Therapeutics.
  • Financial guidance update -- 2026 revenue guidance was raised by $2 billion at each end, now set between $82 billion and $85 billion; non-GAAP EPS guidance increased to a range of $35.50 to $37.00.
  • Dividend and buybacks -- The company paid $1.5 billion in dividends and repurchased $2.4 billion in shares during the quarter.
  • Medicare GLP-1 Bridge program -- The Centers for Medicare & Medicaid Services (CMS) announced a program extension, beginning by July 1, 2026, capping out-of-pocket obesity drug costs at $50 per month for seniors through December 2027.

SUMMARY

Eli Lilly and Company (LLY +10.01%) reported substantial operational momentum via surging incretin portfolio revenues and further global penetration. The broad-based international uptake of Mounjaro, including dominant shares in key ex-US markets, reflects competitive resilience even amid the early entry of generic semaglutide in some regions. Early indicators for Koundeo’s US launch show significant engagement from both prescribers and new-to-class patients, with channel expansion ongoing. Recent business development, including four clinical-stage acquisitions, highlights management’s strategy to diversify across autoimmune, oncology, and neuroscience areas. Strategic updates for payer access, including new employer platforms and the recent CMS Medicare Bridge extension, could further expand obesity and diabetes drug adoption.

  • Management indicated pricing actions continue to drive nonlinear volume expansion, especially across out-of-pocket channels where affordability measures prompt demand elasticity.
  • Koundeo’s pipeline expansion is supported by active regulatory reviews in over 40 countries and planned US submission for type 2 diabetes, with cardiovascular safety now established in Phase III data.
  • Tailored GLP-1 innovation, including next-generation assets like retatrutide and oloralintide, is aimed at further segmenting and capturing unmet needs in weight management and beyond.
  • The company underscored new immunology and oncology data, including Eglis’s durable atopic dermatitis results and Jaypirca’s pivotal CLL outcomes, reinforcing non-obesity franchises as material contributors.
  • Updated guidance specifically reflects “the strength of the entire portfolio,” with initial Koundeo sales tracking to internal expectations but not yet a principal factor in the revised financial outlook.

INDUSTRY GLOSSARY

  • MACE: Major adverse cardiovascular events, often used as an endpoint for diabetes and cardiovascular trials, encompassing heart attack, stroke, cardiovascular death, and hospitalization.
  • PBM: Pharmacy Benefit Manager, an entity that negotiates benefits and prices between insurers, pharmacies, and manufacturers.
  • SERD: Selective Estrogen Receptor Degrader, a class of drugs used in breast cancer therapy.
  • NRDL: National Reimbursement Drug List, China’s official government formulary that determines coverage and reimbursement for pharmaceuticals.
  • SARA: Selective Amylin Receptor Agonist, a drug class targeting weight loss and metabolic control.
  • CLL: Chronic lymphocytic leukemia, a type of cancer that affects white blood cells.

Full Conference Call Transcript

Dave Ricks: Thanks, Mike. 2026 is off to a strong start. During the quarter, we delivered robust revenue growth, advanced our pipeline across all four therapeutic areas, announced multiple business development transactions, and invested to drive our future growth. Earlier this month, we achieved an important milestone as orforgopron was approved by the US FDA under the trade name Koundeo. Koundeo has been proven highly effective for weight management, offering the benefits of GLP-1 therapy in a pill form and can be taken at any time of day without food or water restrictions. Koundeo is a new molecule, a new modality for agonizing GLP-1, and it is a new brand.

This is the first time a new incretin medicine has been launched with obesity as its indication first. While the Koundeo launch has just begun, we are encouraged by momentum against our 2026 launch priorities. These are broad digital and traditional distribution availability, high levels of awareness with consumers of this new option for weight management, educating a broad group of HCPs, helping them start new patients and get comfortable with a new GLP-1 molecule, and, of course, building broad access in commercial, Medicare via the Bridge program, and later Medicaid access for patients.

While the US approval is an important first step, there are over 1 billion people around the world with obesity and related conditions who can be helped by taking an incretin like Koundeo. Recall that a key advantage of Koundeo is scalability, and that oral GLP-1s per BC have not yet been introduced outside the US. Regulatory reviews are ongoing in over 40 countries for obesity and type 2 diabetes, and we plan to submit Koundeo in the US for type 2 diabetes later this quarter. Included in the US type 2 diabetes submission will be the results from the ACHIEVE-4 trial, which we shared a few weeks ago.

In the seventh positive Phase III registration trial, Koundeo showed cardiovascular safety and a lower risk of all-cause death in adults with type 2 diabetes and obesity, without increased cardiovascular risk. In addition to the obesity and diabetes programs, we are actively studying Koundeo in six Phase III programs in other diseases, and we will continue to generate new data for this important new medicine in the quarters and years to come. On slide 5, we list the Q1 financial metrics and the highlights of our progress related to the strategic deliverables of Eli Lilly and Company. Revenue grew 56% compared to Q1 2025.

Our key products, currently defined as Eglis, Inlureo, Jaypirca, Kisunla, Mounjaro, Omvow, and Zepbound, grew by more than $7 billion. Within key products, our immunology, oncology, and neuroscience medicines collectively grew by 160% compared to the same quarter last year as we continue to invest to drive growth across all of our therapeutic areas.

In addition to the progress on Koundeo, we achieved several key pipeline milestones since our last earnings call, including positive Phase III data for Jaypirca in combination with a time-limited regimen in adults with previously treated CLL; positive Phase III data for Eglis in pediatric atopic dermatitis; positive Phase III data for Taltz plus Zepbound in adults with psoriasis and obesity; positive Phase III data for retatrutide in adults with type 2 diabetes; and the initiation of new Phase III programs for oloralintide, sofetibartmipetecan, and brenepatide.

Consistent with our capital allocation strategy to expand investments in business development, we announced agreements to acquire multiple companies with clinical-stage programs: Orna Therapeutics, a company with an in vivo CAR T pipeline to treat autoimmune diseases; Centessa Pharmaceuticals, a company developing a new class of medicines for the treatment of excessive daytime sleepiness and other neurologic conditions; Colonia Therapeutics, a company developing an in vivo platform to treat multiple myeloma and other cancers; and Ajax Therapeutics, a company developing next-generation JAK inhibitors for people with blood cancers. We expect to remain active in business development to complement our internal portfolio, while maintaining the discipline to create shareholder value.

We also distributed $1.5 billion in dividends in the first quarter and executed $2.4 billion in share repurchases. Two important updates occurred this quarter to expand access to obesity medications. First, we launched Lilly Employer Connect. This is a platform introduced as a new way for employers to offer obesity management medicines to their employees. It is still very early for this innovative model, but we are encouraged by the level of employer interest. Second, CMS announced the extension of the Medicare GLP-1 Bridge, which provides access to obesity medicines to people with Medicare. The program will begin no later than 07/01/2026 and run through December 2027.

This program has the potential to help improve the health of millions of seniors while capping their out-of-pocket costs at $50 per month. Now I will turn the call over to Lucas to review our Q1 financial results.

Lucas Montarce: Thanks, Dave. As shown on slide 6, Q1 was another strong quarter of financial performance. Revenue grew 56% compared to Q1 2025, driven by Zepbound and Mounjaro, and solid momentum across all therapeutic areas and geographies. Gross margin as a percentage of revenue was 82.6% in Q1, a decrease of approximately 1 percentage point versus the same quarter last year. The change was driven primarily by lower list prices. Marketing, selling, and administrative expenses increased 19% as we continue to invest in promotional activities to support ongoing and planned new product launches. R&D expenses increased 28%, driven by continued investments in our pipeline, including 42 active Phase III programs.

Our 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. This compares to non-GAAP earnings per share of $3.34 in Q1 2025, inclusive of $1.72 of acquired IPR&D charges. On slide 7, we quantify the effect of price, rate, and volume on revenue growth. US revenue increased 43% in Q1, primarily driven by volume growth from Zepbound and Mounjaro, as well as contributions from our immunology, oncology, and neuroscience portfolio. US price declined by 7%, including the impact of the previously announced direct-to-patient prices for Zepbound.

US price was positively impacted by a one-time adjustment to estimates for rebates and discounts, primarily impacting Zepbound and Mounjaro. Excluding this impact, US price would have declined 10%. Europe revenue grew 37% in constant currency, driven by sustained strong volume growth of Mounjaro. In Japan, revenue grew 42% in constant currency, driven by Mounjaro for type 2 diabetes. In China, revenue growth accelerated with the inclusion of Mounjaro on the National Reimbursement Drug List for type 2 diabetes. And in Rest of World, revenue more than doubled in constant currency as Mounjaro achieved rapid share gains in Latin America and Asia. On slide 8, we provide an update on the performance of our key products.

Within immunology, we continue to increase our presence in atopic dermatitis with Eglis. US new patient starts increased by 90% compared to Q1 2025, and we steadily gained share within the specialty dermatology market. We continue to focus on patient activation and expanded HCP engagement to drive additional gains each year of market. In oncology, Jaypirca posted a strong quarter of growth, gathering additional momentum in the US from the expanded post-BTK indication in CLL. Worldwide sales grew 79% compared to Q1 2025, and we continue to hear positive feedback from physicians globally. We believe Jaypirca has the potential to be a foundational therapy across multiple settings and regimens within CLL.

Although still early, Inlureo performance in the US was encouraging during its first full quarter launch, achieving over 35% share of oral SERD new patient starts in metastatic breast cancer in Q1. For the broader market, growth also increased, largely driven by the launch of Inlureo. In neuroscience, Kisunla continued to be the US leader in amyloid-targeting therapies. The market continues to steadily increase as diagnostic capabilities for Alzheimer’s disease expand. We expect European launches to begin contributing to growth throughout 2026. Finally, in cardiometabolic health, Mounjaro and Zepbound global revenue was $12.8 billion combined, contributing $6.7 billion of growth compared to Q1 2025. As seen on slide 9, the US incretin analog market continued robust growth in Q1.

The recent approval of oral GLP-1s expanded the market, enabling more people to benefit from GLP-1s. Within the US incretin analog obesity market, total prescriptions grew by over 80% in Q1, and Zepbound prescriptions grew at an even faster rate. Zepbound performance was driven by continuous strong uptake in the self-pay channel, as well as steady growth in the commercial segment. However, loss of Medicaid access in certain states had a negative impact on Q1 prescription growth in the high single digits. We recently launched Zepbound in the US in a new equipment device that includes a full month of supply of medicine in one pen.

Self-pay continues to be an important segment for Zepbound, accounting for approximately 45% of total Zepbound prescriptions in Q1 and 55% of new prescriptions. In the US type 2 diabetes incretin analog market, total prescriptions grew 11%, and Mounjaro gained another 3 percentage points of market share compared to 2025. Outside the US, Mounjaro continues steady progress within the incretin analog market. Slide 10 shows aggregate trends in the international incretin analog market. The total international market has increased by 77% since the same period last year, as measured by IQVIA gross sales.

In Q4 last year, Lilly became the market leader outside the US, and the strong growth of Mounjaro in Brazil, the UK, Korea, and China, among others, has resulted in additional share-of-market gains in Q1 2026. We expect continued strong performance outside the US, but with share-of-market leadership already established, increased patient activations will be key to drive sustainable growth. Lastly, on slide 11 is an update of the Koundeo launch. Early feedback from payers, physicians, and patients is encouraging. Koundeo was broadly available in pharmacies on April 9 and is available on more than 12 major telehealth platforms.

Discussions with payers have been productive, and commercial access has been confirmed at two of the three largest US pharmacy benefit managers effective mid-May. In addition, the GLP-1 Bridge program will start no later than July 1, which brings new access to anti-obesity medicines for people with insurance through Medicare. While HCP digital awareness campaigns went live shortly after approval, we began in-person promotion to HCPs on April 17. We expect to drive brand awareness and differentiation through full-scale consumer promotion, including direct-to-consumer TV advertising beginning in Q3. We are focused on commercial execution to drive long-term growth. On slide 12, we provide an update on capital allocation. Moving to slide 13, we share updated expectations for 2026 financial guidance.

We have increased the top and the bottom end of the revenue range by $2 billion and now expect full-year revenue to be between $82 billion and $85 billion. This reflects the strong underlying performance of Mounjaro and Zepbound in Q1. The midpoint of the new revenue range represents 28% growth compared to 2025. We still expect price to be a headwind in the low to mid-teens for the full year. We expect our non-GAAP performance margin to be between 47% and 48.5%, driven by higher revenue. Our tax rate remains unchanged, and we now expect non-GAAP earnings per share of $35.50 to $37.00, an increase of $2.00 to the top and bottom of the non-GAAP earnings per share range.

We are pleased with our Q1 results and confident in our ability to deliver another year of industry-leading growth. Now, I will turn the call over to Dan to highlight our progress on R&D.

Daniel M. Skovronsky: Thanks, Lucas. Since our last earnings call, we have been busy with portfolio progression and significant business development in each of our major therapeutic areas. I will share updates by area, beginning with cardiometabolic health. In addition to the US approval of Koundeo for obesity, we also announced positive top-line results from ACHIEVE-4, the seventh and final Phase III trial in our global registration program for type 2 diabetes and obesity. This trial evaluated the time to first occurrence of MACE events for Koundeo compared to insulin glargine in adults with type 2 diabetes and obesity or overweight who are at increased cardiovascular risk.

As shown on slide 14, Koundeo met the primary endpoint of non-inferiority, with a 16% lower risk of MACE-4 events. And Koundeo met the secondary endpoint with a 23% lower risk in MACE-3 events. Additionally, in a preplanned analysis not controlled for multiplicity, the survival advantage for patients on Koundeo was 57% compared to insulin glargine. These data add a new dimension to Koundeo’s well-characterized effects on reducing A1c and weight, as demonstrated in multiple previous Phase III trials. Now, with results from ACHIEVE-4, cardiovascular safety and a lower risk of all-cause death are added to the clinical profile.

Adverse events were generally consistent with other incretin-based therapies, and no hepatic safety signal was observed in ACHIEVE-4, nor across the seven positive Koundeo Phase III registrational trials. ACHIEVE-4 is also the last trial required for the US type 2 diabetes core registration package. We plan to complete the US submission for type 2 diabetes in late Q2 and anticipate regulatory action before the end of this year. Moving to retatrutide, our GIP, GLP-1, and glucagon triple agonist, we announced positive top-line results from TRANSCEND T2D1, the first Phase III trial of retatrutide in people with type 2 diabetes.

Given the potential counterregulatory impacts of glucagon activity on blood sugar control, we were excited to see profound improvements in hemoglobin A1c, as shown on slide 15. Compared to placebo, retatrutide lowered A1c by an average of 1.7 to 2.0 percentage points across doses. Importantly, we saw that participants lost an average of 11.1 to 16.6 kilograms, or 25 to 37 pounds. While cross-trial comparisons have limitations, these data suggest retatrutide can deliver glycemic control in line with the most widely prescribed incretin therapy for type 2 diabetes, tirzepatide, while delivering additional weight loss. This is critically important given the difficulties people living with type 2 diabetes face when trying to lose weight.

There is a significant need for better weight loss medications for this population. With these data on hand, we are optimistic that retatrutide can meet this need. Adverse events seen with retatrutide were generally consistent with what has been observed in clinical trials of incretin-based therapies, and discontinuation rates due to adverse events were 5% or less across all arms. We look forward to presenting detailed TRANSCEND T2D1 results at the American Diabetes Association Scientific Sessions in June. Together with the positive TRIUMPH-4 results in obesity and knee osteoarthritis, we are beginning to establish a favorable clinical profile for retatrutide, consistent with our goals for this molecule.

The next retatrutide trial to read out is TRIUMPH-1, an 80-week study in people with obesity. We look forward to sharing top-line results later this quarter. Also in cardiometabolic health, we initiated three additional Phase III programs for oloralintide. In addition to the ongoing Phase III obesity programs, we initiated Phase III programs in OA knee pain, obstructive sleep apnea, and as an add-on therapy for obesity. As a selective amylin receptor agonist, or SARA, oloralintide has shown a unique profile in Phase II trials, with GLP-1–like weight loss and improved tolerability.

We are eager to explore additional indications for this promising molecule in what we expect to be a very robust Phase III program across a number of potential indications. We also recently completed our acquisition of Ventix Biosciences, which brings a pipeline of small-molecule therapeutics, including NLRP3 inhibitors designed to treat inflammation across a broad range of diseases. Both NLRP3 inhibitors are now shown in the Lilly pipeline. We also announced a licensing agreement with CSL for clasikizumab for certain indications, and that molecule will be reflected in our pipeline chart once Lilly trials have begun. Moving to immunology, we reported two important data sets for Eglis in atopic dermatitis.

First, in the ADELONG Phase IIIb open-label extension study, Eglis delivered durable disease control for up to four years with once-monthly maintenance dosing. Nearly all patients achieved meaningful skin improvements, 75% achieved near-complete skin clearance, and 80% maintained their results without the need for topical corticosteroids. For people living with chronic relapsing diseases like atopic dermatitis, sustained control delivered with convenience is the ultimate goal. We are pleased that our once-every-eight-week maintenance regimen is currently under FDA review, and we expect regulatory action later this year. If approved, less frequent dosing may be a more convenient option to improve the patient experience and further differentiate Eglis from competitors. The second readout was the Phase III Adorable Spine trial.

Eglis delivered positive outcomes for children as young as six months old with moderate to severe atopic dermatitis. As shown on slide 16, 63% of children treated with Eglis achieved significant skin improvement as measured by EASI-75. In addition, 44% achieved clear or almost clear skin as measured by an IGA 0/1 score. This makes Eglis the first and only selective IL-13 inhibitor with positive Phase III data in this age group, where there are fewer approved medicines than in adolescents and adults. We plan to submit these data to regulators later this year for a potential label expansion.

Also in immunology, we reported positive top-line results from Together PSO, the Phase IIIb study of ixekizumab plus tirzepatide in adults with psoriasis and obesity. In Together PSO, 27% of participants on tirzepatide plus ixekizumab achieved the co-primary endpoint of total skin clearance and 10% or more weight loss, compared to less than 6% of patients on ixekizumab alone. These results are the second successful trial highlighting the benefits of treating psoriatic disease in obesity with concomitant ixekizumab and tirzepatide therapy. This result provides further evidence that incretins may have a broader role in treating immunological diseases. We have additional ongoing Phase 3B combination trials in immunology studying mirikizumab plus tirzepatide in Crohn’s disease and ulcerative colitis.

We continue to assess other immunology settings where incretins may provide additional benefit. We also announced business development in immunology with our agreement to acquire Orna Therapeutics. Orna’s in vivo CAR T pipeline includes potential best-in-class programs to reset the immune system and address B cell–driven autoimmune diseases. We look forward to exploring the full potential of Orna’s platform together with the Orna team. Turning to oncology. We announced positive top-line results from a Phase III pirtobrutinib trial, BRUIN CLL-322. This ambitious study evaluated pirtobrutinib in addition to a fixed-duration regimen of venetoclax and rituximab in patients with previously treated CLL or SLL.

Pirtobrutinib significantly extended progression-free survival compared to the fixed-duration regimen and was the first medicine to utilize and outperform a venetoclax-containing control arm in a Phase III trial in the history of CLL drug development. As shown on slide 17, pirtobrutinib has now been successful in four Phase III studies in CLL, each with compelling efficacy and possibility. Pirtobrutinib has been studied across early- and later-line settings of CLL, demonstrated efficacy as a monotherapy and in combination, and showed efficacy head-to-head against chemoimmunotherapy, a covalent BTK inhibitor, and now a venetoclax-based regimen. The breadth of evidence suggests pirtobrutinib has potential to become a foundational therapy in CLL.

Data from BRUIN CLL-313 and BRUIN CLL-314 are currently under review by regulators for potential label expansion into the first-line setting, and we plan to submit the results of BRUIN CLL-322 to regulators later this year. Building on the breakthrough therapy designation received for platinum-resistant ovarian cancer, we initiated second Phase III trials of sofetibartmipetecan, our folate receptor alpha antibody-drug conjugate, in platinum-sensitive ovarian cancer. We also announced the acquisition of Colonia Therapeutics. Colonia’s lentiviral in vivo CAR T platform has shown very promising early clinical results in people with multiple myeloma, and we look forward to rapidly advancing the lead program with the Colonia team as well as building future medicines using this technology platform.

Earlier this week, we announced the acquisition of Ajax Therapeutics. The lead program, a Phase I JAK2 inhibitor for myelofibrosis and polycythemia vera, builds on Lilly’s established capabilities in blood cancer. Moving on to neuroscience. We initiated a Phase III program for brenepatide, our GIP/GLP-1 dual agonist, in major depressive disorder. This trial will assess if brenepatide can delay time to relapse, addressing a significant unmet need in psychiatry where relapse rates remain high despite available treatments. We have also begun Phase II trials of brenepatide in opioid use disorder and schizophrenia, and initiated Phase II trials for two pain assets, a Nav1.8 inhibitor and an AT2 receptor antagonist.

Lastly, we announced an agreement to acquire Centessa Pharmaceuticals, which will expand our neuroscience portfolio and capabilities into treating sleep disorders. Centessa, a leader in orexin science, is advancing a pipeline of orexin receptor 2 agonists that target the neurobiological system governing the sleep–wake cycle. The lead candidate, clamenorexant, has demonstrated a potential best-in-class profile. We look forward to welcoming the Centessa team to Lilly later this year and continuing the development of these important molecules. Slide 18 shows pipeline movement since our last earnings call, and slide 19 shows a full list of key events expected in 2026. I will now turn the call back to Dave to close.

Dave Ricks: Thanks, Dan. We are pleased with the progress to start this year. We executed well both in driving business results and bringing new medicines to patients. We posted another quarter of impressive revenue and earnings growth, shared top-line results from five positive Phase III trials, announced four acquisitions, initiated six new Phase III programs, and launched an important new Lilly medicine. It was a productive quarter and yet there is a lot more to come in 2026. I will now turn the call over to Mike for the Q&A session.

Mike Czapar: Thank you, Dave. We would like to take as many questions as possible, so consistent with prior quarters, please limit yourself to a single one-part question. Paul, please provide the instructions for how to join the queue, and then we are ready for the first caller. We will now open the call for questions.

Operator: Thank you. At this time, we will be conducting a question-and-answer session. If you have any questions, please press 1 on your phone at this time. Again, we ask that participants limit themselves to one question on today’s call. If you do have a follow-up question, please rejoin the queue by pressing 1 at any time. We also ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. The first question today is coming from Geoffrey Christopher Meacham from Citi. Geoffrey, your line is live.

Geoffrey Christopher Meacham: Great. Hey, guys. Congrats on the quarter. Thanks for the question. Maybe this one is for Dave. Investors seem to be acutely focused on pricing in incretins with not a lot of emphasis on volume. I know you do not want to get too specific, but can you talk at a high level about the margins under a wide range of price scenarios for Lilly? How do you see the investments you have already made in, say, manufacturing, and how does that add to the dynamic and what that means in terms of the competitive moat? Thanks.

Dave Ricks: Sure. Thanks for the question, Geoffrey. Maybe a couple things to point out now that we are five or six quarters deep into this sort of post-shortage world, and we can really pursue expansion on volume in an aggressive way. I think you can see something that is a little different about the obesity and weight loss category from what we think about in other pharmaceuticals, where the barrier is typically more informational, not price sensitivity. But here, clearly, because of the out-of-pocket nature — 75% of ex-US business for Mounjaro is out of pocket, and US is a meaningful portion as well — we see quite expansionary volume, perhaps nonlinear, to price reductions.

Of course, there is a floor on that, and we have sensitivity on our cost structures, etc. But pretty much every time we reduce pricing, we see a pretty large expansion. You also see built into this that the primary pricing effects in Q1 are actually negotiated outcomes with governments. Both the MFN package we negotiated, which cut out-of-pocket costs — you see strong growth, like Lilly Zepbound vials really had quite a strong quarter in Q1 at slightly lower prices — and then in China, we negotiated for diabetes access at a meaningful price reduction, but can see the volume far outstripping the price concession. So, it is a different dynamic.

And I think if investors can think about this category perhaps unlike other pharma categories in the past. In terms of margin sensitivity, it remains true that for this category, for us at least, the unit economics are really driven by fixed costs that are either sunk in the past or unmovable depending on the volume in the present. And as a result, both covering the amortized R&D cost as well as CapEx is a concern from an accounting perspective, but at the margin, we do have latitude. That said, we want to invest in future medicines, and I think that is probably the biggest x-factor as we think about long-term operating margin for the company.

If we have good projects, we will not hesitate to invest in them, whether it be existing medicines — I think you see a record load of Phase III trials at Lilly right now — or new medicines. And we have a very full Phase II and Phase I pipeline that we are deploying capital against. So we have a lot of latitude here, and are getting used to that, but I think this market works a little differently, and we are all sort of adjusting. Good news for Lilly and our incumbent position.

Operator: The next question will be from Christopher Thomas Schott from JPMorgan. Christopher, your line is live.

Christopher Thomas Schott: Great. Thanks so much for the question and congrats on the progress. I just wanted to dig a little bit more into international Mounjaro. Can you share some of the learnings? I think it has been a much better-than-expected launch than we all had anticipated. How do you think about the ramp going forward and longer-term opportunity? And maybe as part of that, should we expect any impact to the ramp from the entry of generic sema in select markets, or is this such an early stage of penetration where that is less relevant? Thanks so much.

Patrik Jonsson: Thank you very much, Christopher. When we look at the first quarter, it is truly strong growth of all our prioritized products across international, but of course Mounjaro. Now we have fully launched in more than 55 countries and we have seen a very strong speed of uptake and also rapid market share gain, also in markets we launched in 2025 — referring to Brazil and Korea — where we currently have an estimated market share of 60%. And of course also the China type 2 NRDL reimbursement.

When we look at the generic, we only have a few weeks of data from India, but it seems like it is really stimulating the growth in the overall obesity market, and that includes our product. Mounjaro has actually been holding market share quite nicely. If we look at Mounjaro prescriptions, they are about 10% higher in recent weeks compared to the period prior to generic sema. So I think it just underscores that dual agonist trumps single agonist. Moving forward, I think we should expect very strong continued year-on-year growth and some sequential growth. We showed earlier that we have a market share above 53% OUS, and that is an average.

In many international markets, we have a market share along the lines of what we see in the US with Zepbound. When you get to that level of share, incremental share gain is getting harder. We will focus our efforts on patient activation, driving increased penetration in the chronic weight-management market and market growth. Secondly, what we have seen during the second half of the year has been some seasonality, mainly driven by the holiday season in Europe, where patients tend to take a drug holiday break or delay initiation of new therapy starts. But overall, strong growth across regions, generic semaglutide seems to be stimulating market growth, and we continue to do well.

We expect continued strong year-on-year growth and sequential growth driven by patient activation.

Operator: The next question will be from Seamus Christopher Fernandez from Guggenheim. Seamus, your line is live.

Seamus Christopher Fernandez: Thanks for the question. We wanted to get a better understanding of how the market, as you see it, is starting to segment and could segment going forward as you look forward to the potential introduction of retatrutide, amidst the Koundeo launch as well as then the follow-on being oloralintide. Where do you see the market really opening up with each of these potential assets? Thanks so much.

Kenneth L. Custer: Thanks for the question, Seamus. I think it is reasonable to expect in this large and growing obesity market — with the number of patients around the world living with overweight or obesity numbering perhaps in the billions — that many are going to want different types of medicines tailored to their individual needs and preferences. We are in the early innings in that regard. We have had GLP-1 single agonists, then dual agonists, and now oral medicines, but we see many other plausible opportunities to tailor medicines to different groups.

As you noted, retatrutide is one of those ideas which very obviously could play to individuals who are seeking greater weight loss, although I will say we see opportunities for retatrutide elsewhere and across the spectrum of obesity. We can position that a few ways based on the Phase II data we have seen. First, this could be a great medicine for patients seeking a non–GLP-1–based mechanism, perhaps due to tolerability they have experienced or are concerned about. It may also be a good drug that could be added on top of existing incretin therapies to provide incremental weight lowering.

There are many other ideas Lilly is investing in, including medicines that could be dosed even less frequently, those that dial in additional metabolic benefits, and maybe some that are ultra–long-acting using genetic medicine approaches. We see all of these as compelling ideas and we feel we are in a leading position in most, if not all, of those spaces.

In terms of how the market will ultimately shake out in terms of percentage of use across those different ideas, it is hard to prognosticate, but many of these ideas are tied to common manufacturing platforms, and we are making the investments to support any of them should they prove to be the most favorable options for managing overweight and obesity.

Operator: The next question will be from Alex Hammond from Wolfe Research. Alex, your line is live.

Alex Hammond: Good morning. Thanks for taking the question. On Medicare access, can you walk us through your strategy to activate these patients? When do you see this playing out — is it more of a 4Q dynamic or more of 2027 as these patients pull through? And with the attractive price point, how do you think about persistence in this population?

Ilya Yuffa: Great question. We are excited about having Part D access starting to activate for obesity medicines in July. We think about a very large world of Part D beneficiaries. Having a long trajectory with a good program starting in July all through 2027 is an important aspect. That will take time to build. We need to have education across physician-based channels, pharmacies, as well as consumer education to understand the full path of different medicines that we have available for treating obesity. That will be a gradual path in 2026 as it starts, and then continued growth in 2027. The $50 per month copay is an important element of affordability for seniors.

We have already seen for Zepbound as well as Mounjaro that they have had great persistency overall relative to other chronic conditions, and we continue to see that. The $50 copay and affordability will only add to that, in addition to all of the health benefits and experiences that people will have over time. We are excited about expanding access very soon.

Operator: The next question will be from Evan David Seigerman from BMO Capital. Evan, your line is live.

Evan David Seigerman: Bigger picture, strategically, as you think about the next levers of growth for the business, what do you need to see from either the immunology, neuro, or oncology franchises to match the scale of the obesity and metabolic businesses? Are there particular assets, BD, or something else? Thank you.

Daniel M. Skovronsky: Thanks, Evan. It is an important question. You are asking about scale, but I would point out in growth rate, those businesses are growing extremely fast. Even without the obesity and metabolic business, Lilly would be one of the fastest-growing pharmaceutical companies in the industry. We are proud of what we are doing in those three areas, and I think each of them has very significant unmet medical needs that we can scale into as our medicines are successful. We like what we have and the direction we are going. Of course, in each of those areas, we also see opportunities to get a lot bigger, and we have highlighted some of the themes already.

You will also see us address some of that through business development. For example, the Centessa acquisition allows us to play in a new area in sleep–wake medicines. The Orna acquisition allows us to play in new areas of immune reset, for example.

Operator: The next question will be from Asad Haider from Goldman Sachs. Asad, your line is live.

Asad Haider: Thanks for taking the question and congrats on the continued strong execution. Going back to Koundeo, appreciate all the color on early launch dynamics, which seem to be playing out along the lines of your messaging that the initial launch trajectory is going to live below that of oral competitors, but then there is going to be an acceleration as we move into the back half of the year. Now with a few weeks of launch under your belt — I think you said 15,000 patients have started taking the drug already — what is your level of confidence on that launch-curve framing in the context of the early experience?

And then related on the guidance range, are you able to provide any high-level commentary on what type of contribution was factored in for Koundeo, recognizing that you said the revised range reflects mainly the strong underlying performance of Mounjaro and Zepbound? Thank you.

Ilya Yuffa: Sure. First, it is early days, but we are pleased with the trajectory and encouraging first start to launch. We just started active Salesforce promotion just over a week ago, and had broad availability in the supply channel only two weeks ago. We are encouraged by the initial leading indicators. There are three key catalysts of growth: growing familiarity among healthcare providers with the clinical profile of Koundeo, building out access, and growing awareness of Koundeo with consumers. We are making progress on all three fronts. For HCPs, we now have over 8,000 prescribers of Koundeo, a third of whom have not previously written an oral GLP-1. This is expansive.

The current sentiment we are hearing is positive on overall efficacy and the “no hassle” factor of a daily oral GLP-1. We will continue execution with sampling, Salesforce promotion, and educational seminars; we are fully in the field. On access, we have confirmed commercial access at two of the large PBMs by mid-May. Medicare access will start in July. Those are important unlocks and expansions. On the consumer front, we now have just over 20,000 patients treated to date, and 80% of those Koundeo prescriptions are new to class. This is expansive and bringing new people into treatment for overweight or obesity.

We have launched digital and social efforts, and we will continue with a full-scale DTC and TV launch in Q3 once prescribers have sufficient familiarity with Koundeo’s profile. Bottom line, we are pleased with the progress. Early indicators are positive and moving in the right direction, and the trajectory will build over time. This is a new brand and new medicine that we are bringing to the market.

Lucas Montarce: Maybe on the guidance piece, to highlight a couple of things. The increase in our guide is driven by the strength of the entire portfolio we mentioned, starting with the incretin portfolio in the US and OUS. In terms of Koundeo specifically, as you heard from Ilya, we are seeing encouraging early feedback from payers, physicians, and patients. We set up the plan at the beginning of the year, and it is very early — we have three weeks of data at this time. It is tracking to our expectations, and we will continue to monitor progress over the year. We feel very confident in the trajectory we have seen so far.

Operator: The next question will be from James Shin from Deutsche Bank. James, your line is live.

James Shin: Good morning. Thank you for the question. This one is for Dave. With Bridge extending into 2027, what is next for balance? Is Lilly working with stakeholders on revisions to secure longer-term Medicare access? Thank you.

Dave Ricks: Sure. Thanks, James. When we signed the agreement with the administration, we all knew Bridge was going to be put in place because it was a midyear launch, and we had understood at the time that there was commitment to 2027 if, as a contingency, the Part D plans did not choose to opt in at a certain rate [inaudible].