Eli Lilly is set to release its Q2 FY2025 earnings report on August 7, 2025, before the U.S. market opens.

According to Bloomberg’s consensus estimates, the company’s revenue is expected to reach $14.689 billion, marking a 30% year-over-year growth. Adjusted net income is forecasted at $5.022 billion, up 42% year-over-year, with adjusted earnings per share (EPS) anticipated at $5.59, reflecting a 42.5% increase year-over-year.

Q1 Recap

In Q1 2025, Eli Lilly reported total revenue of $12.73 billion, reflecting a 45% year-over-year increase and surpassing market expectations of $12.67 billion. Adjusted EPS came in at $3.34, up 29% year-over-year, exceeding the forecast of $3.02.
Sales of the diabetes drug Mounjaro reached $3.84 billion, up a staggering 113% year-over-year. Weight loss drug Zepbound brought in $2.31 billion, more than tripling its revenue compared to the same period last year. These two products propelled Eli Lilly to capture a commanding 53.3% market share in the U.S. GLP-1 incretin drug market.

Despite strong results, the company lowered its full-year EPS guidance from the previous range of $22.50–24.00 to $20.78–22.28. This adjustment primarily reflects a one-time transaction cost of $1.57 billion linked to the $2.5 billion acquisition of Scorpion Therapeutics’ PI3Kα inhibitor project, STX-478. While this acquisition compressed short-term profits, the project promises to enrich Eli Lilly's innovative drug portfolio in the long term.

Key Highlights for This Quarter

1. Can Demand for GLP-1 Drugs Be Sustained?

Eli Lilly’s tirzepatide product line (including Mounjaro and Zepbound) remains in high demand. Last quarter, these two drugs exceeded sales expectations and were the primary drivers of the company’s nearly 45% year-over-year revenue growth. The company is actively expanding production capacity to alleviate supply bottlenecks, and it expects supply capacity to improve by approximately 50% in the second half of this year compared to last year. Additionally, approvals for new indications (such as obstructive sleep apnea) and steady promotion in international markets like the Asia-Pacific region and Latin America could sustain a growth rate exceeding 30% for this product line throughout the year. This quarter’s financial results will be crucial in validating whether such growth momentum can persist.

2. New Drug Pipeline and R&D Expansion

Beyond its marketed products, Eli Lilly is pushing several promising new drugs into late-stage development. Among them, the oral GLP-1 small molecule drug orforglipron is highly anticipated as a more convenient weight-loss treatment. It has entered Phase III clinical trials and is aiming for regulatory approval in 2025. Another multi-mechanistic drug, retatrutide, is perceived as a potential market disruptor in areas like heart failure and metabolic syndrome. Positive clinical data released this quarter could significantly boost market confidence in Eli Lilly’s pipeline strategy, further solidifying its high valuation thesis.

3. Risks in Healthcare Policies and Pricing

Amid efforts to reform the U.S. healthcare system, Eli Lilly faces structural challenges such as pressure from Medicare price negotiations and other pricing uncertainties. Policies like “Most Favored Nation” pricing, reimbursement negotiations, and price caps may place additional strain on profitability. While these short-term impacts are difficult to quantify, some analysts have identified them as medium-term risk variables that could limit profit expansion for certain high-priced innovative drugs. Investors should closely monitor Eli Lilly's responses to these policy dynamics and adjustments to its pricing strategy in the earnings call.

4. Capacity Expansion and Supply Stability

To meet growing demand for its tirzepatide product line, Eli Lilly is accelerating global capacity expansion. The company has announced cumulative investments of over $27 billion in new or expanded production facilities in Indiana, Wisconsin, Ireland, and Germany over the next few years. A new factory in Lebanon, Indiana, dedicated to tirzepatide active pharmaceutical ingredients, is expected to entail a single investment of $900 million, while the Kenosha facility plans to invest approximately $300 million in expanding assembly and packaging capacities. According to company forecasts, these new production lines will start to come online between late 2025 and early 2026, significantly easing current supply-demand tensions and securing stable global market supplies.

Analyst Insights

• Morgan Stanley: Maintains an “Overweight” rating with a $950 target price. Believes GLP-1 drug demand has not yet peaked, predicting Zepbound sales could exceed $15 billion in 2025, but warns of potential risks from slower-than-expected capacity scaling.

• Goldman Sachs: Highlights the commercial potential of orforglipron, the oral GLP-1 drug. Suggests that strong clinical data could make it a “blockbuster,” while cautioning that policy risks may weigh on profit margins post-2026.

• UBS: Notes that Eli Lilly's current price-to-earnings ratio (approximately 45x) already reflects most of the positives. Argues that short-term earnings must exceed expectations to justify its valuation and advises tracking the approval progress of Alzheimer’s drug donanemab.

Summary: Eli Lilly’s short-term growth is dominated by GLP-1 drugs, while its long-term trajectory relies on pipeline innovation and global expansion. This earnings report will test the company's ability to sustain its “high-growth narrative” amid policy and competitive pressures, potentially serving as a turning point for its stock performance.

This content is generated based on Tiger AI and Bloomberg data and is for reference only.