Eli Lilly Stock Rises on Earnings as Investors Await Trump Drug Pricing Deal

President Donald Trump has indicated he wants steep price cuts for Eli Lilly’s Zepbound. (AJ Mast/Bloomberg)

Key Points

• Eli Lilly’s third-quarter earnings top analysts’ estimates. Revenue rises 54% from a year earlier.
• The company faces uncertainty regarding a deal with the Trump administration over pricing for its weight-loss drug, Zepbound.

The drugmaker Eli Lilly reported third-quarter results Thursday that blew past consensus estimates and boosted guidance,

But worries about White House pressure to lower the cost of its blockbuster obesity drug is still weighing on the stock. Before the market open, shares were up 3.7%.

The company posted adjusted earnings of $7.02 a share, compared with the $5.89 forecast by analysts, according to FactSet. Revenue totaled $17.6 billion, up 54% from the previous year and ahead of Wall Street’s call for $16.1 billion.

Lilly now says it expects non-GAAP earnings from $23 to $23.70 a share this year, up from $21.75 to $23. The new guidance is well above the current analyst consensus estimate of $22.48, and suggests Wall Street’s fourth quarter expectations may be too low.

“Arguably the strongest print across 3Q so far,” Cantor analyst Carter Gould wrote.

The modest run-up in share price, despite the company’s strong performance, could reflect the nagging question of how the company will address Trump administration demands to lower the price of Zepbound, its weight loss blockbuster. Earlier this month, President Donald Trump said prices of branded weight-loss medicines would drop “about $150.” Zepbound’s list price is $1,080 a month.

While peers Pfizer and AstraZeneca have reached deals with the government—they made small pricing concessions in return for an exemption from threatened sector-specific drug tariffs—Lilly has yet to announce an agreement.

Still, Lilly’s dominance of the weight loss sector is advancing unabated.

On Thursday, Lilly said its share of the U.S. market for incretin analogs, the category of drugs that includes the GLP-1 weight loss and diabetes, was 57.9% in the third quarter, compared with 41.7% for competitor Novo Nordisk .

Lilly’s share was up from 57% in the second quarter, despite a deal Novo cut with CVS Health that pushed patients off Zepbound and into taking Novo’s Wegovy as of July 1.

Revenue from Mounjaro, the company’s Type 2 diabetes treatment, came in at $6.5 billion, above analysts’ consensus estimate of $5.4 billion. Revenue from Zepbound, its GLP-1 weight-loss drug, was in line with expectations at $3.6 billion.

The company is planning to submit its weight loss and Type 2 diabetes pill orforglipron for FDA approval later this year. Data on orforglipron have been underwhelming, but the company is marching forward toward a planned launch next year.

Lilly shares are up about 5% this year. Compared with its peers, the drugmaker has been more insulated from drug-price negotiation worries because of the sustained enthusiasm over Zepbound and Mounjaro, respectively.

Lilly appears to have triumphed over Novo Nordisk in the battle for the weight-loss market. While both stocks are down from their mid-2024 highs, Lilly shares have battled back, while Novo’s American depositary receipt has dipped more than 60%. That selloff has pushed Novo into crisis mode, swapping out its CEO and its board this year.

The question of what kind of agreement Lilly will be able to extract from the White House is hanging over the stock. Shares jumped about 14% over two days after Pfizer first reported its deal, but a month has passed without any government deal news from Lilly.

On Wednesday, a day ahead of its earnings report, Lilly rolled out an agreement with Walmart that allows Zepbound vials bought through LillyDirect to be picked up at Walmart stores.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com