Eli Lilly Q1 2025 Earnings Report: Momentum Builds on Incretin Leadership and Pipeline Execution
Strong Performance Driven by Incretin Therapies and Robust Pipeline
Eli Lilly posted an exceptional Q1 2025, with revenue rising 45% year-over-year to $12.73 billion, surpassing expectations. This strong growth was largely driven by Mounjaro and Zepbound, which generated $3.84 billion and $2.31 billion in sales, respectively. While volume growth across global markets drove the top-line results, pricing pressure in the U.S. and Europe slightly dampened the benefits. Gross margin expanded to 83.5%, supported by a favorable product mix, while earnings per share (EPS) came in at $3.34, including a $1.72 hit from acquired in-process research and development (IPR&D) charges related to pipeline acquisitions like Scorpion Therapeutics. Excluding these charges, underlying profitability remained strong, reflecting robust operating leverage from higher revenue.
Key Financial Highlights:
Revenue: $12.73 billion, up 45% YoY
Gross Margin: 83.5%, up from 81% in Q1 2024
EPS: $3.34, including IPR&D charges
Mounjaro Sales: $3.84 billion
Zepbound Sales: $2.31 billion
Leadership in Incretin-Based Therapies
Lilly’s leadership in incretin-based therapies continues to strengthen, with Mounjaro now the market leader in new U.S. diabetes prescriptions and Zepbound dominating the U.S. obesity market with a 74% share of new prescriptions. This momentum is further supported by international launches, where demand is currently outpacing supply. The company also highlighted promising Phase 3 data for orforglipron, a once-daily oral GLP-1 therapy that could become a significant game-changer, offering injectable-like efficacy in a pill format. Additional readouts for orforglipron in both diabetes and obesity are expected throughout 2025.
Pipeline Advancements and Regulatory Approvals
Eli Lilly’s pipeline continues to show impressive progress. The company secured regulatory approvals for Jaypirca (for chronic lymphocytic leukemia) and Omvoh (for Crohn’s disease). Phase 3 programs were initiated for olomorasib and other promising candidates. The company is also seeing encouraging developments in neuroscience (Kisunla), oncology (Verzenio), and cardiovascular therapies (muvalaplin, retatrutide). With over $50 billion in U.S. investment announced to meet global demand, Lilly is scaling up its manufacturing capacity to support continued growth.
Global Expansion and Manufacturing Investments
Manufacturing remains a key focus, as Lilly invests heavily to ensure its infrastructure can meet increasing global demand. Despite concerns about tariffs and trade barriers, the company expects minimal impact to its 2025 financials and has reaffirmed its full-year revenue guidance of $58–61 billion. The company’s ability to scale production and meet rising demand across multiple therapies is a testament to its strong strategic positioning in the healthcare space.
Guidance and Risks
Looking ahead, Lilly maintained its margin and revenue outlook but slightly reduced EPS guidance to a range of $20.78 to $22.28 due to R&D charges. Analysts remain bullish on the company’s long-term prospects, emphasizing its dominant position in the incretin space, strong pipeline, and expanded manufacturing capabilities. Risks include potential supply bottlenecks, pricing pressures, and geopolitical trade headwinds, but these challenges appear manageable in the near term.
Here’s Our Take:
Eli Lilly’s Q1 2025 results further cement its leadership in incretin-based therapies, with impressive growth in Mounjaro and Zepbound driving overall performance. The company’s robust pipeline, combined with significant investments in manufacturing, positions it for sustained success. While there are near-term risks, including competitive pressures and macroeconomic uncertainties, Lilly’s long-term growth outlook remains strong.
The company remains one of the most compelling growth stories in the healthcare sector, driven by its leadership in incretin therapies, a diversified pipeline, and global expansion plans. Although near-term valuation may appear rich, and there are headline risks around tariffs and competition in the obesity drug market, Lilly’s fundamentals and innovation-driven growth potential make it a solid hold for long-term investors seeking capital appreciation. With its durable competitive advantages, Lilly is poised for continued success in the years to come.
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