Eli Lilly (LLY.US) Q3 results beat expectations, full-year revenue guidance raised to $91 billion$92 billion

Eli Lilly (LLY.US) reported third-quarter 2026 results before the U.S. market open on October 29: revenue of $24.397 billion, up 39% year-over-year, above LSEG expectations of about $22.6 billion, driven by volume growth of 53% and a 15% decline in realized prices. Reported net income was $6.451 billion, or $7.22 per share, up 16% year-over-year; non-GAAP earnings per share were $7.48, up 7% year-over-year, above LSEG/IBES expectations of $6.49. The two core products continued to gain traction: Mounjaro global revenue was $10.723 billion, up 65% year-over-year, and Zepbound was $5.352 billion, up 49%; Key Products totaled $17.1 billion, with revenue in immunology, oncology, and neuroscience doubling year-over-year. U.S. revenue rose 34% to $15.1 billion; revenue outside the U.S. rose 47% to $9.3 billion, with volume up 76%, but prices fell 29% due to Mounjaro's inclusion in China's National Reimbursement Drug List. Affected by the AtaiBeckley and Curevo acquisitions, the company recognized $4.181 billion, or $4.57 per share, in acquired in-process research and development expenses in the quarter (versus $0.71 in the year-ago period); this expense is included in both GAAP and non-GAAP results. The company also said quarterly revenue included about $900 million in one-time benefits, mainly a $410 million Jardiance sales milestone and favorable adjustments to rebate and discount estimates. On guidance, full-year revenue guidance was raised to $91 billion$92 billion from $85 billion$87 billion, the performance margin was raised to 52.0%52.5% from 49.0%50.5%, and the tax rate was raised to 19%20% from 18%19%; however, underlying earnings improvement was offset by the aforementioned acquired R&D expenses, and full-year adjusted earnings per share guidance was lowered to $35.00$36.00 from $35.50$36.50. On the regulatory front, the U.S. FDA approved Mounjaro to reduce cardiovascular risk in adults with type 2 diabetes; approved Onswik (once-weekly basal insulin) for adults with type 2 diabetes; approved Inluriyo in combination with Verzenio for adults with ER+, HER2-, ESR1-mutated advanced or metastatic breast cancer; and expanded the indication for Jaypirca to adults with previously untreated chronic lymphocytic leukemia or small lymphocytic lymphoma. Pipeline highlights include: positive topline results from a head-to-head Phase III trial of retatrutide versus Ozempic 2 mg in adults with type 2 diabetes; Phase III results for Ebglyss in moderate-to-severe atopic dermatitis of the hands and feet; and Phase II results for EloraTZP in adults with obesity and type 2 diabetes, with a Phase III trial to begin in the fourth quarter of 2026. Business development activities in the third quarter of 2026 included completing the acquisition of AtaiBeckley to advance therapies for treatment-resistant depression and other mental health disorders. After the quarter ended, the company completed the acquisition of Merida Biosciences to advance treatments for severe autoimmune and allergic diseases. As of press time, Eli Lilly was up 3.33% in premarket trading.