Ladies and gentlemen, thank you for standing by, and welcome to the Eli Lilly Third Quarter 2026 Earnings Conference Call. At this time, all participants are on a listen only mode. Later, we will be conducting a question and answer session and instructions will be given at that time. Should you require operator assistance during the call, please press star, then zero and an operator will assist you offline. I would now like to turn the conference over to your host, Mike Czapar, Senior Vice President of Investor Relations. Please go ahead.
Good morning. Thank you for joining us for Eli Lilly and Company's Q3 2026 earnings call. I am Mike Czapar, Senior Vice President of Investor Relations.
Joining me on today's call are Dave Ricks, Lilly's Chair and CEO, Lucas Montarce, Chief Financial Officer, Dr. Dan Skovronsky, Chief Scientific and Product Officer, Adrienne Brown, President of Lilly Immunology, Dr. Carole Ho, President of Lilly Neuroscience, Ilya Yuffa, President of Lilly USA and Global Customer Capabilities, Jake Van Naarden, President of Lilly Oncology and Head of Business Development, Patrik Jonsson, President of Lilly International, and Ken Custer, President of Lilly Cardiometabolic Health. During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to several factors, including those listed on slide 4. Additional information concerning factors that could cause actual results to differ is contained in our latest Form 10-K and subsequent filings with the SEC. The information we provide about our products and pipeline is for the benefit of the investment community.
It is not intended to be promotional or otherwise influence prescribing decisions. Our commentary will focus on our non-GAAP financial measures. Now I will turn the call over to Dave.
Thank you, Mike. Q3 was another quarter of solid execution. We delivered strong financial results, raised our full year financial guidance, advanced our pipeline, and expanded our manufacturing footprint. Revenue grew nearly $7 billion compared to Q3 2025, and our key product revenue increased by over $6 billion. Within key products, revenue from our oncology, immunology, and neuroscience portfolio doubled versus last year. We continued the global rollout of Foundayo, launching in the U.K., Mexico, and Saudi Arabia for people with obesity, and in Mexico for people with type two diabetes. We achieved several key regulatory and pipeline milestones since our last call, including the U.S. approval of our new weekly insulin and new indications for Inluriyo, Jaypirca, and Mounjaro.
As part of the Medicare GLP-1 Bridge Program, we expanded access to obesity medicines in the U.S. for approximately 20 million seniors. Since the July 1 launch, more than half a million people have filled a prescription for a Lilly Medicine through this program. We have heard positive feedback from patients and physicians about the initial implementation. Within the GLP-1 Bridge Program, the Lilly portfolio is performing well. Among new bridge patients, seven out of 10 are starting on a Lilly obesity medicine. We are encouraged to see the strong uptake of the Bridge Program and believe it has the potential to both improve outcomes for seniors and save costs for Medicare. A recently published paper from the University of Southern California's Schaeffer Center for Health Policy and Economics estimated the expansion of anti-obesity medications in Medicare could deliver over $20 billion of cumulative savings over 10 years.
This is an encouraging indicator of the magnitude of savings the GLP-1 Bridge Program could generate. We added to our pipeline through business development this quarter, acquiring AtaiBeckley Inc. and Merida Biosciences. We also progressed our manufacturing build-out to support our long-term growth outlook. We broke ground on two new manufacturing facilities, a $6.5 billion facility in Houston, Texas, and a $5 billion facility in Richmond, Virginia. We distributed $1.5 billion in dividends in the third quarter and executed $400 million in share repurchases. We launched the Lilly Change the Course Commitment. Through this new initiative, we set a new goal to reach as many people in resource-limited settings who have obesity and related diseases as in high income countries prior to 2040. Lastly, we announced Patrik Jonsson, President of Lilly International, will retire at the end of 2026.
Ilya Yuffa will expand his responsibilities to include Lilly International as part of a newly created role called President of Lilly Global Markets. I want to thank Patrik for his many contributions over a successful 36-year career at Lilly. Now I'll turn the call over to Lucas to review our Q3 results.
Thanks, Dave. As shown on slide seven, Q3 was another quarter of industry leading financial results. Revenue grew 39% compared to Q3 2025, driven by Mounjaro, Zepbound, and strong momentum across therapeutic areas and geographies. Gross margin as a percentage of revenue increased 80 basis points to 84.4%. Favorable product mix and improved cost of production were partially offset by lower realized prices. Marketing, selling, and administrative expenses increased 14% as we invested in promotional activities to support current and planned product launches.
R&D expenses increased 23%, driven by investment in our growing pipeline of early and late-stage programs and new molecules added through business development. Our non-GAAP performance margin was 54.2%, an increase of 5.9 percentage points from Q3 2025, driven by revenue growth.
Non-GAAP earnings per share were $7.48, including acquired R&D charges of $4.57. This compares to $7.02 in Q3 2025, which included $0.71 of acquired R&D charges. On slide 8, we quantify the effect of price, rate, and volume on revenue growth. U.S. revenue increased 34% in Q3, primarily driven by volume growth from Zepbound and Mounjaro, partially offset by a 7% decline in price. U.S. price benefited from a favorable adjustment to estimates from rebates and discounts. Excluding this adjustment, U.S. price declined 10%. Europe revenue grew 29% in constant currency, driven by sustained strong volume growth of Mounjaro. Growth also benefited from a $410 million one-time milestone payment related to Jardiance. No additional Jardiance milestone payment remains under our agreement with Boehringer Ingelheim. In Japan, revenue grew 26% in constant currency driven by Mounjaro and Kisunla.
Mounjaro posted robust volume growth as share of new patient starts increased to over 50%. In China, revenue grew 62% in constant currency driven by the uptake of Mounjaro. Mounjaro is the first medicine in China to exceed $1 billion of revenue during its first full year. In rest of the world, revenue grew 87% in constant currency driven by Mounjaro, primarily in Korea, Turkey, and Brazil. Q3 revenue was positively impacted by approximately $900 million of previously mentioned items, including milestones and changes to estimates for rebates and discounts. On slide nine, we provide an update on the performance of our key products. Within immunology, Ebglyss worldwide revenue grew 59% compared to Q3 2025. In the U.S., Ebglyss continued to gain share of new prescriptions in the specialty dermatology market and is the fastest growing medicine in atopic dermatitis.
In oncology, Jaypirca had another strong quarter as worldwide revenue increased 59% compared to Q3 2025. In the U.S., Jaypirca was the fastest growing BTK inhibitor as measured by total prescriptions. Inluriyo continued its impressive uptake in the metastatic breast cancer oral SERD market, exiting Q3 with more than 60% share of new U.S. prescriptions and 40% of U.S. total prescriptions. In neuroscience, Kisunla revenue grew 175% compared to Q3 2025. Kisunla maintained its leadership position in U.S. amyloid-targeting therapies. Diagnostic testing momentum continues to build, and the number of p-tau217 blood tests more than doubled compared to Q3 2025, translating to more people being diagnosed with Alzheimer's disease and accessing treatment. Finally, in cardiometabolic health, Mounjaro and Zepbound combined for more than $16 billion of revenue, representing $6 billion of growth compared to Q3 2025.
As seen on slide 10, total prescriptions in the U.S. incretin market grew 32% compared to Q3 2025. Oral GLP-1s and the Medicare GLP-1 Bridge Program are expanding the number of people taking incretin therapy. In the U.S., total incretin prescriptions for obesity grew 82% in Q3. Approximately six out of 10 total prescriptions and more than seven out of 10 injectable prescriptions were for a Lilly medicine. In the U.S., type two diabetes incretin total prescription grew 8% compared to Q3 2025, and the Lilly portfolio continues to lead here with more than 60% share of market. Outside the U.S., Lilly's portfolio again performed well. Slide 11 shows aggregate trends in international incretins, which have increased by 53% since the same period last year, as measured by IQVIA gross sales.
Lilly is strengthening its leadership position outside the U.S., gaining nearly four percentage points of share compared to Q2 2026 to reach approximately 58%. Slide 12 provides an update on the Foundayo launch. In the U.S., total prescriptions and the share of new patients continue to rise. Approximately four in 10 patients starting an oral obesity medicine choose Foundayo, and the number of new Foundayo patients in Q3 doubled from the previous quarter. We look forward to launching Foundayo in type two diabetes in the U.S. and expect regulatory action in Q4. Outside the U.S., Foundayo has launched in four countries and is under regulatory review in more than 40 additional countries. We continue to expect a global rollout in all major markets in 2027. On slide 13, we provide an update on year-to-date capital allocation. Moving to slide 14 is our updated 2026 financial guidance.
Based on strong underlying performance across our portfolio, we now expect full-year revenue to be between $91 billion and $92 billion. We saw strengths in the U.S. driven by rapid uptake of the Medicare GLP-1 Bridge Program, and outside of the U.S. from strong Mounjaro performance. Given our updated revenue outlook, we now expect non-GAAP performance margin to be between 52% and 52.5%. We expect non-GAAP earnings per share of $35 to 36. This reflects an increase of $4.07 per share at the midpoint of the range before updates to the Q3 acquired IPR&D charges of $4.57 per share. We are pleased with our Q3 results and confident in our ability to deliver another year of industry-leading growth. We will share our 2027 financial guidance on our Q4 call in January.
However, I will share highlights on our initial thoughts regarding some of the pushes and pulls that we expect to impact our 2027 financial outlook. Beginning with the U.S. revenue, we expect sustained volume growth in the incretin market and the full year impact of the Medicare GLP-1 Bridge Access and the launch of Foundayo in type two diabetes. Outside the U.S., we expect Mounjaro's leadership position to continue. We expect to launch Foundayo, which will drive additional market growth. Consistent with prior years, we expect net realized price to be a headwind, more than offset by volume growth. It is also worth noting that the 2026 revenue benefited from approximately $2 billion of one-time items primarily related to milestones payments and changes in estimates for rebates and discounts that we don't expect to recur.
Now, I will turn the call over to Dan to provide an update on our pipeline.
Thanks, Lucas. Since our last earnings call, we've made progress across Lilly R&D. I'll begin in cardiometabolic health by recapping our most recent phase III readout from our GIP, GLP-1, glucagon triple agonist, retatrutide. Just yesterday, we shared top-line results from TRANSCEND-T2D-2, the head-to-head trial of retatrutide versus semaglutide in people with type two diabetes. As shown on slide 15, retatrutide delivered greater A1C reduction and more than double the weight loss of 2 mg semaglutide. Retatrutide reduced A1C by 2.2% compared to 1.8% on 2 mg of semaglutide. These data demonstrate retatrutide can provide even more glycemic control than an approved diabetes medicine, provide a potential new treatment option.
What's even more striking was the 20%-21% weight loss achieved in people taking retatrutide compared to 9.4% weight loss in the semaglutide arm. For people with type two diabetes who struggle to lose weight, retatrutide continues to demonstrate powerful weight loss alongside compelling glycemic control in this difficult-to-treat population. Moving to another Lilly triple agonist, at last month's European Association for the Study of Diabetes meeting, we presented phase II data for EloraTZP. EloraTZP is a combination of our selective amylin receptor agonist, eloralintide, and our GIP, GLP-1 dual agonist, tirzepatide. As shown on slide 16, EloraTZP delivered weight loss of 23.3% at 48 weeks for people with type two diabetes and obesity. In a population that struggles to lose weight, this powerful combination delivered 57% more weight loss compared to tirzepatide, the world's most prescribed incretin.
In addition, the highest dose combination of EloraTZP delivered A1C reduction of 2.9% at 48 weeks, and more than three out of four patients achieved an A1C below 5.7%, a level associated with normal blood glucose. Pending replication of these first-of-their-kind results in our phase III trials, we believe this drug could meaningfully improve what is possible in the treatment of type two diabetes and obesity, and these data highlight the potential importance of treating with three physiologic hormones at once. Moving to slide 17. As one might expect, when rapidly escalating doses of a medicine with multiple mechanisms, the highest dose EloraTZP arm had a higher discontinuation rate due to adverse events. As we move into phase III, of course, we will use a slower, optimized dose escalation schedule, which we anticipate will improve tolerability.
Note that monotherapy eloralintide showed excellent tolerability, with discontinuations due to adverse events lower than placebo. We look forward to beginning the phase III trials of co-formulated EloraTZP imminently. We also presented results from ACHIEVE-4, the cardiovascular outcomes trial of orforglipron in people with type two diabetes and obesity with increased cardiovascular risk. As shown on slide 18, orforglipron met the primary endpoint of non-inferiority versus insulin glargine, reaffirming its cardiovascular safety profile. In additional pre-specified analysis, compared to insulin glargine, orforglipron showed a 16% lower risk of MACE-4, and for people fortunate enough to have been randomized to receive orforglipron in this trial, there was a 57% lower risk of all-cause death. These data complement the six previously presented phase III trials for orforglipron and support the potential of orforglipron as a foundational daily oral treatment for people with obesity and people with type two diabetes.
Also, in cardiometabolic health this quarter, in the U.S., we received two important FDA approvals. The FDA approved tirzepatide to reduce cardiovascular risk in adults with type two diabetes, and the FDA approved our once-weekly basal insulin efsitora alfa, for adults with type two diabetes under the brand name Onswik. Weekly basal insulin could significantly improve patient experience by reducing the number of injections compared to daily basal insulin. Moving to oncology. The FDA approved pirtobrutinib for certain patients with previously untreated CLL or SLL based on the BRUIN CLL-313 phase III trial. Pirtobrutinib reduced the risk of disease progression or death by 80% compared to bendamustine plus rituximab. This approval underscores pirtobrutinib's versatility across the CLL continuum of care. It can now be used in the first-line setting for appropriate patients, in addition to its valuable role in the relapsed or refractory post-covalent BTK inhibitor setting.
The FDA also approved imlunestrant in combination with abemaciclib in ER-positive, HER2-negative, ESR1-mutated advanced breast cancer. The all-oral combination of imlunestrant and abemaciclib gives patients a treatment approach that targets the two central drivers of ER-positive breast cancer with an evidence-based treatment approach, an established tolerability profile, and no new monitoring requirements. We look forward to the results from EMBER-4, ongoing phase III trial of imlunestrant in high-risk early breast cancer. Elsewhere in oncology, we initiated a phase III trial with our PI3K alpha inhibitor tersolisib in combination with a CDK4/6 inhibitor and endocrine therapy in advanced breast cancer. Tersolisib is a mutant-selective PI3K alpha inhibitor intended to target the PI3K mutations in breast cancer while sparing normal PI3K in healthy tissue. We believe this profile could lead to efficacy in the first-line metastatic setting without as much of the toxicity as seen with other agents.
We now have eight new oncology medicines or major new indications that are in phase III trials or will start phase III shortly. Moving to neuroscience. We completed the acquisition of AtaiBeckley, adding a portfolio of neuroplastogens with potential to treat depression and other serious mental health conditions. We are pleased to welcome the AtaiBeckley team to Lilly and look forward to advancing multiple clinical programs together. Moving to immunology, we shared positive phase III results for lebrikizumab in people with moderate-to-severe atopic dermatitis of the hands and feet. Hand and foot atopic dermatitis is painful and difficult to treat, and these data show lebrikizumab can be a new option for patients without the need for topical treatments. We have submitted these data to the FDA for potential label update.
We also shared 52-week results from phase IIIb trials of ixekizumab and tirzepatide used together in people with psoriasis or psoriatic arthritis and obesity. The ixekizumab and tirzepatide arm delivered greater improvements in skin and joint outcomes than ixekizumab alone, highlighting the importance of immunometabolic health. Earlier this month, we closed the acquisition of Merida Biosciences, which is developing MER-511, a precision immunology therapy in phase I for Graves' disease and thyroid eye disease. This drug was designed to selectively degrade the disease-causing autoantibodies while preserving normal immune function. We are excited about the potential to help patients here, and we are pleased to welcome the Merida team to Lilly. Slides 19 and 20 show pipeline movements since our last earnings call and the key events we expect in the remainder of 2026.
We look forward to sharing more details about our pipeline at the upcoming Lilly Innovation Day on December 7th.
Although we will not have time to share everything we are working on, we will do our best to curate a few examples that illustrate the depth and breadth of our capabilities and our pipeline at Lilly. I will now turn the call back to Dave for closing remarks.
Thanks, Dan. We were pleased with the progress in Q3 and throughout 2026. We delivered another quarter of strong financial results, advanced our pipeline through Lilly Research Labs and business development, and started building two new manufacturing facilities in the U.S. to support our future growth. While we continue to make excellent progress during a period of industry-leading growth, we remain focused on investing now to support our long-term vision to redefine how a pharmaceutical company can improve human health at a global scale. We have developed differentiated capabilities in R&D, manufacturing, and commercial operations, where we are engaging directly with patients through platforms like LillyDirect, changing the way people access healthcare. Given the depth of our incretin pipeline, we expect our leadership position in cardiometabolic health and broad pipeline of next-generation obesity medicines to have an impact on global health for decades to come.
With three-fourths of our clinical pipeline focused on diseases outside of obesity, we are developing new medicines that have the potential to impact a broad range of disease to deliver diversified and durable growth for Lilly and our shareholders. Q3 was another strong quarter and another step toward our long-term goals. I will turn the call over to Mike to moderate the Q&A session.
Great. Thank you, Dave. We would like to take questions from as many callers as possible. To that end, consistent with prior quarters, please limit yourself to one question. Operator, please provide the instructions for how to join the queue, and then we are ready for the first caller.
Thank you. At this time, we will be conducting our question and answer session. If you have any questions, please press star one on your phone at this time. We ask that participants limit themselves to one question on today's call. If you have a follow-up question, please rejoin the queue by pressing star one at any time. We also ask, if listening on speaker phone today, please pick up your handset while asking your questions to provide optimum sound quality. Please hold while we poll for questions. Thank you. Our first question today is coming from Chris Schott with JPMorgan. Your line is live.
Great. Thanks so much and congrats on all the progress. I guess a bigger picture one. You have raised guidance on the top line by roughly $10 billion year to date. I guess you reflect on what is happening here.
Just talk a little bit about what the biggest surprises have been as we think about U.S. versus OUS, cash pay versus commercial, et cetera. Probably as importantly, just when you think about these dynamics going forward, are we just seeing a fundamentally larger incretin opportunity than you anticipated, or is this more of a pull forward of demand as we think about that kind of longer addressable TAM for the company? Thanks so much.
Great. Thanks, Chris, for the question. To talk a bit about guidance and our outlook for incretins in the future, we will go to Lucas.
Yeah, Chris, thank you for your question.
I think the starting point, if you go back when we set up the guide at the beginning of the year, you may remember that we have that slide with, again, the opportunities and still events that we had in front of us for 2026. We talk about the launch of Foundayo in Q2. We talk about the starting the Medicare Bridge Program. Then, of course, we talk about the variable of the growth OUS, in particular on the incretin out-of-pocket business and the runway of that growth. Again, what you see now in the latest guidance that we just shared today is actually a confirmation that we are tracking well across all of them, even better than what we anticipated. So that is, I think, a positive confirmation of the strengths and the solid performance that we continue to see.
Going back to your second part of the question about the runway of that, is that pulling forward or not? The way that we think about it, if you look at just the incretin business, we are still scratching the surface on the number of patients that we can reach. You look at the U.S., and we are talking about one out of 10 patients that we are reaching nowadays. In OUS, we are talking about two patients out of 100 patients. So it is actually a really low base, though the number seems really big, $16 billion this quarter of incretin business. The runway of opportunity of growth is still for many years to come from my perspective. On top of that, we continue to expand the breadth across all the therapeutic areas.
Super also happy to report the 100% growth on the rest of the key products across oncology, immunology, and neuroscience. So that is just to give you some color about the short term and how we think about also long term.
Great. Next question, please.
Thank you. Our next question is coming from Geoff Meacham with Citi. Your line is live.
Oh, great. Hey, guys. Good morning. Thanks for the question. I wanted to ask about what data you have on tirzepatide persistency in obesity just over the course of the past year or so. Importantly, when you look to next year, would you expect Foundayo and retatrutide to be different than that in terms of real-world experience? Thank you.
Thanks, Geoff. To talk about tirzepatide persistency in obesity and thoughts on the pipeline looking in the future, we will go to Ilya.
Sure. Geoff, thanks for the question.
What we have seen in persistency and actually before we even launched Zepbound, and we have had success with Trulicity in the past, and that was kind of the standard of what is possible for chronic medicine for adherence, which ended up becoming around 16 to 18 months of adherence. What we are seeing with Zepbound is that in the covered space, we continue to see the trajectory of being just as beneficial in terms of adherence as we have seen in Trulicity. Even in the self-pay, we are seeing that close to the covered market. So the persistency actually for a chronic medication, Zepbound is doing extraordinarily well. Now, expectations for oral, it is still early, but as typical chronic medications, as well, if you take a look at orals, they typically are lower adherence overall relative to weekly injectable therapies, and that is what we expect to see.
One additional data point that I think will be important as we look at even the success of Bridge, early days in Bridge, having a low out-of-pocket helps with that friction point, and we are seeing improved adherence in Bridge. That will all play out as part of the different friction points, both in terms of out-of-pocket as well as the benefits that people gain from these therapies.
Great. Thanks, Ilya. Next question, please.
Thank you. Our next question is coming from Seamus Fernandez with Guggenheim. Your line is live.
Oh, thanks so much. I am going to do the non-obesity question. Kisunla is actually starting to show the prospect of becoming a blockbuster product and starting to grow faster, maybe a little bit faster overseas.
But I was hoping, Dan, you might weigh in on the prospects for TRAILBLAZER-3, the prospects for success, and how you see that program really evolving the treatment paradigm should it succeed, particularly in the context of some of the novel tau biomarkers that we are starting to see. I think there are a lot of questions from investors that we get on what really is the market opportunity here given the Kisunla uptake, but it does seem like some of those behaviors are changing. Thanks.
Great. Thanks, Seamus. Always welcome neuroscience questions. So we will go to Carole to talk about prospects for Kisunla and maybe even kind of the neuroscience space more broadly.
Yes, we are very excited to see the growth of Kisunla over the last year, and this growth is both driven by our confidence in this product with its convenient 30-minute infusion time, once-monthly dosing, and the opportunity for treat to clear in this patient population. We have also seen a tremendous growth in the opportunity for diagnosis with blood-based biomarkers, with p-tau217 becoming available. And we see this becoming a diagnostic that enables access to early diagnosis, potentially even in primary care offices in the future.
As we look at TRAILBLAZER-3, which is our study looking at prevention in cognitively unimpaired people, looking at prevention of progression to early symptomatic Alzheimer's disease, these biomarkers will certainly also enable early diagnosis for people that have risk concerns about their cognition before loss of their cognition. So we are excited both about the growth in early symptomatic Alzheimer's disease, but also if TRAILBLAZER-3 reads out positively, really expanding this market to earlier stages of disease where we already have preliminary evidence from our early symptomatic Alzheimer's disease space that treating earlier will have a more significant impact on cognition.
Thanks, Carole. Next question, please.
Thank you. Our next question is coming from Evan Seigerman with BMO Capital Markets. Your line is live.
Hi, guys. Thank you so much for taking my question. Bigger picture one here.
The incretin franchise is becoming an enormous earnings driver, but it also raises the question of what comes next. When you look beyond the cardiometabolic disease, where do you see the best opportunity to build Lilly's next multi-billion dollar growth pillar? Does recent BD activity suggest that neuroscience and immunology are emerging as higher strategic priorities? Thank you so much.
Great. Thanks, Evan, for the question about the next big opportunity after incretin. We will go to Dan to talk a bit about some of the pipeline opportunities he is excited about.
Thanks, Evan. I would say that we are excited about all three of our other therapeutic areas, which are immunology, neuroscience, and oncology, and the BD activity reflects not just our strategic intent to grow those areas, but the intersection of that strategic intent with assets that are actually out there and are attractive to us.
Oncology is probably the space where we have made the most progress, and we highlighted eight really important late-stage programs, several of which could be quite large in size. For example, the recent Kelonia acquisition, which targets myeloma, is a huge opportunity if the data continue to hold out the way we expect them to. Neuroscience, of course, is the area that has the largest unmet medical need and really the least progress in the pharmaceutical industry towards addressing that. We are firmly committed to making a difference for patients in this space, and you can see our acquisitions in sleep and psychiatry, combined with our in-house expertise in neurodegeneration, our aim to really grow that market on behalf of patients. Then finally, immunology. I think there has been a lot of crowding in immunology on a few probably important targets.
But we also see a great opportunity actually to raise expectations in immunology with breakthrough therapies that I think can deliver efficacy that is never been seen before, and that is what we are trying to do with programs like the Merida acquisition or the Orna acquisition, which is aimed at immune reset. So lots of growth opportunities across those areas.
Thank you, Dan. Next caller, please.
Thank you. Our next question is coming from Kerry Holford with Berenberg. Your line is live.
Thank you for taking my question. I wonder if you can speak a little more about Medicare Bridge. How does the split between injectable and pill in that channel differ from others? It seems like the majority of Medicare demand is injectable. I wonder, has that surprised you with regard to your products in that space?
Also, could you talk to what proportion of patients in that Medicare channel for the Bridge program specifically are naive versus existing patients transferring from other channels?
Thank you, Kerry. We will go to Ilya to talk a bit about Bridge, the injectable versus pill split, as well as naive versus switches.
Thanks for the question. For Bridge, one, it has performed extraordinarily well. I think we knew that it was going to be a significant benefit for seniors. The program itself is simple in understanding the criteria and low out of pocket. All of those things combined, we have seen about three-quarters, 75% of people coming into Bridge going into injectable therapy, seven out of 10 in total choosing Lilly Medicine, and so we have performed really well across Bridge. That is higher than maybe some of the self-pay segment.
One of the components of that is the same low out of pocket and getting the greatest efficacy. The standard of care that's been established in obesity has favored Zepbound in particular. We are seeing good growth and uptake of orals and Foundayo as well. In terms of expanding the number of people actually being treated after the first bolus of people coming into Medicare, we are seeing now that about 80% of the people getting treatment under Bridge are naive or have not been on incretin therapy
in the past. We see this as a significant driver of access long term, and it is still early days. While it is performing above our expectations, we see continued opportunity here to expand access and utilization and not only improve care of seniors, but as we shared earlier on independent study, also the potential of saving significant amount for Medicare overall.
Thank you, Ilya. Next caller, please.
Thank you. Our next question is coming from Asad Haider with Goldman Sachs. Your line is live.
Great. Thanks for taking the question, and congrats on all the progress. Maybe just back to Foundayo. Thanks for the comments earlier, and I know that's still very early in the trajectory, but just curious to hear any updated framing on how the launch is playing out both in the U.S. as well as internationally in the context of both competitive dynamics versus oral Wegovy and then your own internal expectations. On the titration schedule for Foundayo, the two lower doses still represent about 75%-80% of TRx in recent weeks. Where do you see that going at steady state? Thank you.
Great. Thanks, Asad. I think we'll start maybe with international and go to Patrik to talk a bit about some of the ex-U.S. launches. Ilya, maybe a couple of nuggets on the U.S. as well.
Well, thank you very much. We have now launched in four markets outside the U.S. We started with the UAE very late in Q2. In the second half of Q3, we launched in U.K., Saudi, and Mexico. I would say that so far, the launch is very much in line with our expectations. There are a lot of similarities with the learnings from the U.S. in terms of the orals are truly expanding the market, and we see a huge amount of patients actually being new to incretins. In Middle East, I think we have the political situation to take into account, but we are the market leader in UAE with competition from Wegovy. In Saudi, we have launched in both type two and chronic weight management, and we have a good uptake there.
U.K., we have been subject to the pre-vetting requirements by the MHRA, so we have actually not been able to fully promote until now in October. But the signs here are also that the orals are expanding the market. Mexico, week six, a very good uptake and actually slightly above our expectations. Most importantly, I think we see that there is a lot of work to be done here, and we need to do all of the work that has been done in the U.S. as well. We recently got the CHMP positive opinion that should hopefully result in a regulatory approval by year-end, and we are ready to launch across chronic weight management and type two diabetes in more than 40 markets next year. But the initial focus is going to be on cash pay and chronic weight management since type two reimbursement will take some time.
Yeah, and in the U.S., we have made significant progress since last quarter. You have seen over half a million TRx in the quarter, but the fundamentals and some of the key indicators that we have been talking about as part of our initial launch have been moving in a really positive direction. Consumer awareness and interest has improved with our investment and campaign with Martha Stewart. You are seeing also number of trialists have more than doubled since last quarter, and so we are seeing good progression of adoption from providers. That is showing up in our share of market. So our NBRx share of market is approaching around four out of 10, and so good progress overall for the growth of Foundayo in the oral segment. Even in the sequential growth of orals from Q2 to Q3, we are taking 45% of that growth with Foundayo.
In terms of the titration, it is expected that it takes time to titrate to the maintenance doses, but we have actually seen good progress on our maintenance doses. We have multiple maintenance doses, so about 25% of people are at one of our maintenance doses. That is actually higher than what you see on Wegovy pill. So we are encouraged by that. Of course, that is something continue to monitor, but the experience overall that we are seeing both from provider and consumer has been positive.
Great.
I would just add, we are under review for type two diabetes, and we see that as an extraordinary opportunity for Foundayo as well. Remembering today in the U.S., roughly half the volume of GLP-1s is in diabetes. So that is a big market expansion. Of course, it needs access and reimbursement when we get that, but that is very promising, sort of another leg to the stool here for the Foundayo performance.
Great. Thank you all. Next question, please.
Thank you. Our next question is coming from Steve Scala with TD Cowen. Your line is live.
Thank you so much. This is a follow-up to Chris's earlier question, and with all due respect, Lilly's financial guidance hasn't been a good predictor on ultimate results. I am curious, what is the most frequent source of the surprise? Specifically, has it tended to be positive unit developments, or has it been lack of negatives on price, or is it some desire to just lean incredibly cautiously on guidance? If it's the latter, why is that? A key for investors, I think, is to determine when the surprise factor runs its course. Any color would be appreciated. Thank you.
Great. Thanks, Steve, for the good direct question. We'll go to Lucas to maybe provide a little extra color on guidance, and David, if you want to add anything to it for Steve as well.
Sure. Yeah.
Yeah, Steve, thank you for the question. I think in terms of the variables that I described on the first question are still, again, the variables that we had when we started the year that
Of course, again, now with yesterday newspaper, you think about that again, we are performing way much better than what we had initially guided to. But if you look at the runway of that growth across the U.S. and our OUS, has been all the events we were public about, again, that the unknowns associated with that. Starting with the Bridge program, when that Bridge program would start, the uptake of that as well, the progression of all OUS markets, both in share and also penetration. And those all played out better than what we anticipated. Still the drivers are those ones. Again, we continue to guide to what we forecast in our internal bottom-up approach that we have on our forecasting model and try to be as public as possible about how we see the projections, and now we provided some perspective into 2027 as well.
I think from my perspective, we continue to drive, again, a very thorough process every single quarter and be public about, again, the variables that could affect positively or negatively as well our guidance projections.
Yeah, Steve, I appreciate the question. You've followed the company a long time. Our goal is to give as accurate a projection as we can. But of course, there's asymmetry with missing on the downside. That's everyone's impulse. But let's remember, we're in the middle of the largest new category expansion in the history of the pharmaceutical industry, and Lilly's leading that. There's a number of things that have never actually happened before that we're trying to project, and we prefer to give a posture that investors can rely on versus one that is more speculative. And at the JPMorgan conference at the beginning of the year, I said there's two big variables this year. If I knew the answer to, we would have had a tighter range. One was the uptake in Bridge, which we didn't really know.
We weren't even sure about the start time of Bridge at that point. The other was the depth of the consumer purchasing internationally, and whether we were really just skimming very high net worth individuals in these out-of-pocket markets, or if more middle income households would be interested in improving their health and losing weight at scale. I think both of those this year turned out to be positive for us, thus the roughly $10 billion improvement over first time guide. As time goes on, I suspect we'll have fewer and fewer of those never before done things, and the guidance can become more predictable. So appreciate the question, but that's sort of how I've seen it over the last three years. We're beating on the up.
That's better than missing on the down, and I think that's good news, mostly not because of the earnings beats, but because we're actually executing against a really scaled opportunity and performing well. Thanks.
Great. Thank you, Dave and Lucas. Next question, please.
Thank you. Our next question is coming from Terence Flynn with Morgan Stanley. Your line is live.
Great. Thanks for taking the question. Maybe one on the pipeline for Dan. There has been a growing focus on longer-acting incretins. You guys recently said you have three different programs in the clinic. Just wondering if we can expect any clinical data at the R&D day on these programs, or if you can tell us what the stage is of development, because I think that is probably the only hole you have in your incretin pipeline. Thank you.
Great. Thanks, Terence. We will actually go to Ken to talk about the long-acting approach and if there is anything to share beyond what has been public.
Yeah, thanks for the question, Terence. As we discussed previously, we do see an opportunity for longer-acting incretins, particularly in a category this big with such a consumer emphasis. We are taking the same approach we usually do when we see an important square on the board that we want to fill, which is baking off several competing platforms to see which one provides the best product possible. This is a space where we think the molecule properties are really going to matter. That is why we have not signaled anything yet. But it is true we have multiple efforts in the clinic. Those are a range of different technological approaches, including existing time extension technologies, as well as ones that could be part of the future. Then we have other efforts that we have disclosed in business development around formulation technologies.
Again, we will look at all these data and make an informed decision on which effort or efforts to advance to phase III.
Thank you, Ken. Next question, please.
Thank you. Our next question is coming from Trung Huynh with RBC. Your line is live.
Hi, guys. Thanks for taking my questions. As you look to 2027, what are you seeing in terms of opt-in trends for GLP-1 coverage amongst the larger employers in the U.S. And with those dynamics in mind and Bridge continuing to ramp, could your U.S. channel mix meaningfully evolve next year so it potentially creates additional pricing pressure amongst the mid-teens decline that you've absorbed in 2026. Or could we see pricing headwinds in the same range for 2027. Thank you.
Great. Thanks, Trung. We'll go to Ilya to talk about 2027 early opt-in trends and maybe the broader access environment as well as we look into the next year.
Yeah. Overall, obviously, there has been noise around a number of employers opting out of coverage. At the same time, we are having positive discussions through our Employer Connect and other channels on improving access there as well. Our expectation is that overall access on the commercial side will maintain relatively stable through 2027. Obviously, we continue to have conversations to improve on that. The main access improvements overall for 2027 will more likely be predominantly growth of Medicare and Medicaid as opportunities for expanded coverage. That will have a segment mix more towards a lower price
lower net price, not about decreasing the price overall, but more just a segment mix. That as well as some level of self-pay in the lower net price per TRx. In terms of commercial overall pricing, I would expect modest and disciplined approach around pricing and access to maintain. But overall stable in the commercial and increased coverage in Medicare and Medicaid.
Great. Thank you, Ilya. Next question, please.
Thank you. Our next question is coming from Akash Tewari with Jefferies. Your line is live.
Hey, thanks so much. Your teams talked about generally predictable and consistent GLP-1 pricing declines in the U.S. out to the end of the decade. How does that look OUS? Could we see more stability there than maybe investors expect? How do you think about the net price per patient in the U.S. versus international markets, ex China evolving over time? It currently seems quite similar. Dave, you mentioned something interesting. Can you talk a bit more about the size of this emerging middle-income cash pay international market opportunity relative to what we've seen in the U.S. so far? Thank you.
Thanks, Akash. Sounds like questions for Patrik. We'll talk a bit about pricing expectations on the cadence from here, thinking about net price U.S. versus OUS and anything about the emergence of a middle-income cash pay market.
Yeah. Thank you very much. You know what, we have taken a very disciplined approach to pricing OUS, and I think we have seen that both providers, consumers, and payers are willing to pay for a differentiated product. We have seen that even after the launch of generics in India, Brazil, and Canada, we're holding our shares and continue to grow, and that's a discipline that we will continue to apply. In terms of the out-of-pocket willingness, we actually see quite a big willingness to pay out of pocket OUS as well. Of course, when markets are getting further penetrated and like the U.K., where we launched more than two years ago, and where we have a penetration very much along the lines of the U.S., we see a lower growth as we expected.
But I think overall, taking into account where we are penetration-wise, low single digit, long term, we see a tremendous opportunity OUS for the incretins, and we will continue our efforts as well to gain type two reimbursement, which is very important. We made some progress in Q3 here, now having nine European markets covered, but we will continue those efforts and continue to take a disciplined approach in terms of pricing.
Maybe just to comment on the ex-U.S. versus U.S. Our goal, because of the consumer nature of this, is to have a much tighter band of pricing on obesity medicines than maybe you have seen historically in other medicine categories.
Thanks, Dave and Patrik. Next question, please.
Thank you. Our next question is coming from Umer Raffat with Evercore. Your line is live.
Morning, guys. I wanted to spend a quick second on a potentially sizable opportunity in the early breast cancer for imlunestrant. I understand there is a planned interim for you guys, a competitor trial stopped on interim. How should we think about early stoppage odds for your trial? Perhaps more importantly, if you could put the effect size comparisons versus lidERA in perspective, knowing that the treatment setting for you is a little more real world with meaningful post CDK4 penetration. Thank you very much.
Great. Thank you, Umer. We will go to Jake to talk a bit about EMBER-4.
Yeah, thanks, Umer. Super excited about Inluriyo both in its current actual commercial performance, where it is doing great and helping lots of people with monotherapy and new combination with Verzenio. As you mentioned, the real big opportunity is in the adjuvant setting with the EMBER-4 study. We have not talked about interim analyses on this study. We have been pretty consistent that we expect the study to read out in 2027, next year. We are sticking with that. That is what we expect. I think you are raising a good point.
The treatment setting that we are exploring is much more real world, I think, than what was examined in lidERA, both in the context of the prevalent population that exists that may want to switch from existing endocrine therapy to new oral SERD, and a study run in the context of modern standard of care of CDK4/6 inhibitors like Verzenio, which our study had and theirs did not. A bunch of differences. I think when our study does read out successfully, I hope it will be much more relevant to clinical practice and easy to understand how to slot it in. I do not want to comment on anticipated effect sizes because we just need the study to read out and see what it shows us. But excited to get to that point.
Thank you, Jake. Next question, please.
Thank you. Our next question is coming from Carter Gould with Cantor. Your line is live.
Great. Good morning. Congrats on the quarter. Maybe just to go back to the Bridge program, have you had conversations with the administration or the various Part D sponsors that give you confidence this program will either be extended or balance will be revisited in a different iteration? I guess to the point, just your confidence that there won't be a disruption at the end of 2027.
Yeah. Thanks, Carter. We'll go to Dave to talk a bit about discussions with the administration.
Yeah. Well, I think we're pretty optimistic about expansion, I think for three reasons, Carter. One is the early uptake is strong, and I think you see both demand and appropriate on-label use of the medications. The administration did a fantastic job implementing the PA criteria in a way that was not over-indexed or under-indexed, and I think if we look at the people using the medicines, relatively high BMI, comorbid people. That leads to the second point, which is cost effectiveness.
I think we highlight today the independent study from USC that estimates not just breakeven, but massive cost savings for Medicare due to this program. CMS will, because it's being done as a pilot program, will do their own analysis, but I think all signals now point to a pretty successful cost effectiveness, which could yield either a legislative or a regulatory shift in the coverage permanently. In the meantime, I think there's a lot of energy with the people running CMS at the current point to continue this, and the right way to do that is put this into the Part D benefit. So I would expect, and it's probably a good conversation to have on our Q1 call, this to then shift to working with the carriers for the 2028 calendar year.
We will certainly work with the administration and all our partners who supply Part D coverage to have good access across our portfolio, and continue the success of the program so far.
Thanks, Dave. We will try to squeeze in two more if we could, please. Next question, please.
Thank you. Our next question is coming from Michael Yee with UBS Securities. Your line is live.
Great. Thank you. Maybe just a long-term portfolio question around obesity and how you view a consumerism-driven market where people will gravitate towards differentiated or different options within your portfolio. I am thinking about retatrutide and amylin. Can you maybe just put on your prediction hat about what that portfolio would look like and how consumers would choose between these different products given various competition and price declines? Thank you.
Thanks, Mike. We will go to Ken to talk about the breadth of the obesity portfolio and how to think about what patients each are for.
Yeah. Thanks, Mike, for the question. Maybe let us start with the size of the problem we are confronting here is 110 million or so people living in the U.S. with obesity or overweight, and internationally, that number has a B at the start of it. That is why we are pursuing a portfolio approach, knowing that many individuals will seek out and find over time what works best for them. Each of the molecules in our growing portfolio, they have unique features, and probably each of them can fill multiple roles. We have talked about how Foundayo is a great on-ramp for patients earlier in their weight loss journey, but can be a great maintenance option as well. Tirzepatide we see as sort of a cornerstone with a growing body of evidence to support it, including SURMOUNT-MMO very soon.
As we focus on Reta, this is a medicine that looks like it could do a lot of jobs. On the high end, delivering tremendous power. At the lower end, delivering a lot of simplicity and really differentiated responses in some important subpopulations, including men and type two diabetics, where it is the first agent that has ever shown greater than 20% weight lowering. Beyond that, we have our selective amylin portfolio, which opens up a new pharmacological axis that can offer incretin-like weight lowering with really more placebo-like GI tolerability. Last but not least, EloraTZP, we see this as sort of the most physiological approach yet to weight loss, that could also, again, play a lot of roles in this, including providing really differentiated HbA1c lowering in patients with type two diabetes.
Again, all of these agents, we think they can play a lot of roles. We probably cannot, a priori, stipulate for any individual patient what is going to work best for them. But what is important to us is that we offer all of them, we offer choice, we put them on a really, a platform with a consistent appearance, experience that allows patients to start, switch, and step up to any Lilly medicine that works best for them. Overall, no matter which one they choose, they will still be on a Lilly medicine.
Great. Thanks, Ken. We will go to the last question, please.
Thank you. Our final question is coming from Courtney Breen with Bernstein. Your line is live.
Lilly team, thanks for the question today. I know we have spoken a little bit about the pipeline, but I instead wanted to think about other sources of innovation, and namely the M&A that you have been doing and licensing that you have been doing externally to support your pipeline. Obviously, there has been a rapid pace for the first part of this year. Can you just help us understand where you believe you are at in terms of the risk/reward balance across your portfolio, the types of areas that might be of interest to continue adding, and how you are kind of ensuring that you are keeping the bar high as you continue to take on and broaden this pipeline kind of beyond what we see in phase II right now? Thank you so much.
Yeah. Thanks, Courtney. We will go to Jake to talk a bit about the kind of BD strategy, the process to assess different transactions, and kind of the interest across the board.
Yeah. Thanks for the question. It is funny you mentioned risk/reward. Risk is really our friend here. Risk allows us to actually create value, and one of the ways we can deploy that, or the reasons we can, is because we do not need revenue tomorrow. I think we have this opportunity while the incretin business and the rest of the commercial businesses are doing so well to plan for the next decade or two ahead, which allows us to take more risk in a calculated way. Some of that is very early stage deal making, which oftentimes are not really even press released by us, so some of them you do not maybe know as much about.
We have done a bunch of, I would say, clinical stage, but not super late stage clinical deals this year where we see enough risk still within the program for us to create value, but enough de-risking for us to feel confident that there is a real medicine or maybe more than one medicine there. We can point to a handful of deals even on the year, this year, that fit that paradigm. I think you will see more of both of those categories from us across all the therapeutic areas. We are not solving for any one given therapeutic area.
We are just solving for great products, great science, and great people that we can bring into the company and fuel growth into the decades to come. I think that gives us a competitive advantage, frankly, in how we look for what we want to take inside relative to our peers.
We have a pretty rigorous process to stay disciplined on a deal-by-deal basis, and I am excited about what we have done so far and what is to come. Thanks.
Thank you.
Great. Go to Dave for a couple closing comments?
Okay. Excellent. Thanks for joining us for today's call. Obviously a strong quarter for the company. I want to take a moment, though, to promote an upcoming event, which is our December 7 Lilly Innovation Day. This will really be an R&D and pipeline-focused day. We will have other sections in that as well. I hope all of you can join us live, or if not, remotely for that event. I also want to take a minute just to, again, congratulate Patrik on a great career, and I think this will be your last earnings call with us. You played a big part in our success over the last, well, 30 years of your career, but certainly the most recent six or seven. So thank you, Patrik, for everything.
Please follow up with the IR team if you have additional questions we did not get to, and look forward to seeing everyone in early December.
Thank you. This does conclude our conference for today. This conference will be made available for replay beginning at 1:00 P.M. today and running through November 26, 2026 at midnight. You may access the replay system at any time by dialing 800-332-6854 and entering the access code 938904. International dialers can call 973-528-0005. Again, those numbers are 800-332-6854 and 973-528-0005 with the access code 938904. Thank you for your participation, and you may now disconnect your lines.