Lilly Caps Record 2025, Eyes $80B+ in 2026 as Pipeline and Pricing Dynamics Shape Future
INDIANAPOLIS – Eli Lilly (NYSE: LLY) closed a monumental 2025 and set ambitious targets for the coming year, demonstrating the pharmaceutical giant's resilience even as it navigates complex pricing landscapes. During its fourth-quarter earnings call, executives detailed a year of explosive growth driven by its flagship incretin medicines for diabetes and obesity, while outlining a 2026 financial outlook that anticipates higher revenue despite mounting pressure on drug prices.
"2025 was a transformative year for Lilly," said Chair and CEO Dave Ricks. "We delivered robust revenue growth, advanced our pipeline meaningfully, and significantly expanded our manufacturing footprint to meet unprecedented demand." The financials underscore his point: full-year revenue hit $65.2 billion, a staggering 45% increase over 2024. Earnings per share (EPS) leapt 86% to $24.21.
CFO Lucas Montarce provided the quarterly snapshot, noting Q4 revenue grew 43% year-over-year. Gross margin remained robust at 83.2%, supported by a favorable product mix and improved production efficiencies that offset lower realized prices. Investments in the future were evident as R&D expense rose 26% and marketing, selling, and administrative expense increased 29%.
The engine of this growth is Lilly's incretin portfolio, including Mounjaro and Zepbound. Montarce said these key products contributed over $13 billion in Q4 revenue alone, growing 91% compared to the same period in 2024. U.S. growth was volume-driven but faced a 7% price decline, while international expansion, particularly for Mounjaro, added significant volume.
2026 Guidance: Volume vs. Price
Looking ahead, Lilly forecasts 2026 revenue between $80 billion and $83 billion, implying roughly 25% growth at the midpoint. This projection banks on "industry-leading volume growth" to counter what the company expects to be a "low to mid-teens" percentage drag from pricing. Key U.S. factors include a new government access agreement for obesity medicines, updated direct-to-patient pricing for Zepbound, and lower Medicaid prices for mature products.
Internationally, the recent inclusion of Mounjaro on China's National Reimbursement Drug List is a double-edged sword, expected to boost access but pressure prices. Montarce expressed confidence that volume gains would ultimately offset these concessions. The company guided to a 2026 EPS range of $33.50 to $35 and a non-GAAP performance margin of 46% to 47.5%.
Pipeline Progress: From Obesity to Oncology
Chief Scientific Officer Dr. Dan Skovronsky highlighted several late-stage advancements. In cardiometabolic health, the phase III MAINTAIN trial for oral Orforglipron showed positive results for weight maintenance. Lilly has submitted the drug for FDA approval in obesity, with a U.S. launch expected in Q2 2026.
More striking data came from the TRIUMPH-4 trial for retatrutide in patients with obesity and knee osteoarthritis. Participants lost an average of 29% of body weight over 68 weeks and reported a 76% reduction in pain scores, with over one in eight becoming completely pain-free.
In immunology, a combination therapy of ixekizumab and tirzepatide for psoriatic arthritis with obesity showed a 64% relative improvement in symptom reduction over monotherapy. The oncology portfolio also advanced, with full FDA approval for pirtobrutinib in certain blood cancers and submissions underway for earlier-line use.
Access, Affordability, and Manufacturing Scale
A central theme was expanding patient access. Ricks announced a U.S. government agreement to offer obesity medicines through Medicare and Medicaid with a $50 monthly copay, effective by July 1, 2026. The direct-to-patient channel, LillyDirect, engaged over 1 million patients in 2025.
To meet soaring demand, Ricks noted the company has committed over $55 billion to manufacturing expansion since 2020, with new sites coming online. This investment helped Lilly exceed its goal to produce 1.8 times more incretin doses in late 2025 than in the same period in 2024. The company also returned $2.8 billion to shareholders via dividends and buybacks in 2025.
Market Voices: Analyst and Investor Reactions
Sarah Chen, Healthcare Portfolio Manager at Horizon Capital: "Lilly's guidance is a masterclass in volume-over-price strategy. The underlying demand story for GLP-1s remains intact, and their pipeline de-risks the long-term outlook. The manufacturing build-out is costly but necessary to secure a dominant market position."
Dr. Marcus Thorne, Endocrinologist & Independent Consultant: "The clinical data, especially for retatrutide's impact on osteoarthritis pain, is practice-changing. It moves these drugs from 'weight loss agents' to potential disease-modifying therapies for obesity-related comorbidities. The real-world access through Medicare, however, will be the true test of their impact."
Franklin "Frank" Doyle, Retired Pharmacist & Shareholder Advocate: "A 45% revenue jump and they still can't make enough? The stock's up, but I'm furious. They're spending billions on buybacks and fancy direct websites while my patients on fixed incomes still struggle. That '$50 copay' is a PR stunt—how many hoops will they have to jump through? This isn't innovation; it's profiteering wrapped in a press release."
Anika Sharma, Biotech Equity Analyst at Sterling Partners: "The guidance bake-in for high-teens price erosion is sobering but realistic. It signals the end of the unimpeded pricing era. Lilly's bet is that oral GLP-1s like orforglipron will expand the market exponentially, making up the difference. The next 12-18 months are critical for launch execution."