Ladies and gentlemen, thank you for standing by. And welcome to the Eli Lilly Third Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode.
Later, we will be conducting a question-and-answer session and instructions. Should you require operator assistance during the call, please press star, and an operator will assist you offline. I would now like to turn the conference over to your host, Michael Czapar, Senior Vice President of Investor Relations.
Please go ahead.
Good morning. Thank you for joining us for Eli Lilly and Company's Q3 26 earnings call. I am Michael Czapar, Senior Vice President of Investor Relations.
Joining me on today's call are David A. Ricks, Lilly's chair and CEO; Lucas E. Montarce, chief financial officer; Dr. Daniel Skovronsky, chief scientific and medical officer; Adrienne Brown, president of Lilly Immunology; Dr. Carole Ho, president of Lilly Neuroscience; Ilya Yuffa, president of Lilly USA and global customer capabilities; Jacob S. Van Naarden, president of Lilly Oncology and head of business development; Patrik Jonsson, president of Lilly International; and Kenneth 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 ks and subsequent filings with the SEC. 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 David.
David A. Ricks
Chairman & CEO
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 25. 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 UK, Mexico, and Saudi Arabia for people with obesity, and in Mexico for people with type 2 diabetes. We achieved several key regulatory and pipeline milestones since our last call, including The US 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 US for approximately 20 million seniors. Since the July 1st 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, 7 out of 10 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 and Merida Biosciences.
We also progressed our manufacturing build out. To support our long term growth outlook. We broke ground on 2 new manufacturing facilities, a $6.5 billion facility in Houston, Texas and a $5 billion facility in Richmond, Virginia.
Distributed $1.5 billion of 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. 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 26. 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.
And now I will turn the call over to Lucas to review our Q3 results.
Thanks, David. As shown on slide 7, Q3 was another quarter of industry leading financial results. Revenue grew 39% compared to Q3 25.
Driven by Mounjaro, Zepbound, and a strong momentum across therapeutic areas and Gross margin as a percentage of revenue increased 80 basis points to 84.4%, as favorable product mix and an 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 25 driven by revenue growth. Non GAAP earnings per share were $7.48 including acquired IPR&D charges of $4.57 This compares to $7.20 in Q3 25, which included $0.71 of acquired IPR&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. US 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 Monjaro. Growth also benefited from a $410 million 1-time milestone payment related to charge ins.
No additional charge ins milestone payment remains under our agreement with Beringer 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 uptick 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 estimate for rebates and discounts.
On Slide 9, we provide an update on the performance of our key products. Within immunology, Ebglyss worldwide revenue grew 59% compared to Q3 25 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 25. In The US, 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 US total prescriptions. In neuroscience, Kisunla revenue grew 175% compared to Q3 25. 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 25. 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. Contributing $6 billion of growth compared to Q3 25. As seen on slide 10, total prescriptions in The U. S. Incretin market grew 32% compared to Q3 25.
Oral GLP-1s and the Medicare GLP-1 bridge program are expanding the number of people taking incretin therapy. In The US, total incretin for obesity grew 82% in Q3, Approximately 6 out of 10 total prescriptions. And more than 7 out of 10 injectable prescriptions were for a Lilly medicine.
In The US, type 2 diabetes incretin total prescription grew 8% compared to Q3 25. And the Lilly portfolio continues to lead here with more than 60% share of market. Outside The US, 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 strengthened its leadership position outside The U. S, gaining nearly 4 percentage points of share compared to Q2 26, to reach approximately 58%.
Slide 12 provides an update on the Foundayo launch. In The US, total prescriptions and the share of new patients continue to rise. Approximately 4 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 2 diabetes in The U. S. And expect regulatory action in Q4. Outside The US, Foundayo has launched in 4 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 a strong underlying performance across our portfolio, we now expect full year revenue to be between $91 and $92 billion We saw strength in The U. S. Driven by rapid uptake of the Medicare GLP-1 bridge program. And outside of The US, from strong Mounjaro performance. Given our updated revenue outlook, we now expect non GAAP performance margin to be between 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 outlooks. Beginning with The US 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 2 diabetes.
Outside The US, we expect Mounjaro's leadership position to continue. We expect to launch Foundayo, which will drive additional market growth. Consistent with previous 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 1-time items primarily related to milestones payments and changes in estimates for rebates and discounts that we do not expect to recur. Now I will turn the call over to Daniel to provide an update on our pipeline.
Thanks, Lucas. Since our last earnings call, we have made progress across Lilly R&D. I will begin in cardiometabolic health. By recapping our most recent Phase 3 readout.
From our GIP GLP-1-glucagon triple agonist, retatrutide. Just yesterday, we shared top line results from TRANSCEND T2D 2. A head to head trial of retatrutide versus semaglutide, in people with type 2 diabetes.
As shown on slide 15, retatrutide delivered greater A1c reduction and more than doubled the weight loss of 2 milligrams semaglutide. Retatrutide reduced A1C by 2.2%, compared to 1.8% on 2 milligrams of semaglutide. These data demonstrate retatrutide can provide even more glycemic control, than an approved diabetes medicine. providing a potential new treatment option. what is even more striking was the 20% to 21% weight loss achieved in people taking retatrutide compared to 9.4% weight loss in the semaglutide arm.
For people with type 2 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 2 data for Olora-TZP. Olora-TZP is a combination of our selective amylin receptor agonist, eloralintide, and our GIP GLP-1 dual agonist, tirzepatide.
As shown on slide 16, Olora-TZP delivered weight loss of 23.3% at 48 weeks for people with type 2 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 Olora-TZP delivered A1c reduction of 2.9%. At 48 weeks. And more than 3 out of 4 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 2 diabetes and obesity. And these data highlight the potential importance of treating with 3 physiologic hormones at once. Moving to slide 17.
As 1 might expect, when rapidly escalating doses of a medicine with multiple mechanisms, the highest dose Olora-TZP arm had a higher discontinuation rate due to adverse events. As we move into Phase 3, we, of course, will use a slower, optimized dose escalation schedule. Which we anticipate will improve tolerability.
Note that monotherapy of eloralintide showed excellent tolerability, with discontinuations due to adverse events lower than placebo. We look forward to beginning the Phase 3 trials of co formulated Olora-TZP imminently. We also presented results from ACHIEVE-4, the cardiovascular outcomes trial, of orforglipron in people with type 2 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. An additional prespecified 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 6 previously presented Phase 3 trials for orforglipron and support the potential of orfagliptron as a foundational daily oral treatment. For people with obesity and people with type 2 diabetes.
Also in cardiometabolic health this quarter, in The US we received 2 important FDA approvals. The FDA approved tirzepatide to reduce cardiovascular risk in adults with type 2 diabetes. And the FDA approved our once weekly basal insulin, insulin efsitora alfa, for adults with type 2 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 3 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 for ER-positive, HER 2 negative ESR 1 mutated advanced breast cancer. The all oral combination of imlunestrant and Abemaciclib gives patients a treatment approach that targets the 2 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 3 trial of imlunestrant in high risk early breast cancer. Elsewhere in oncology, we initiated a Phase 3 trial with our PI3 kinase alpha inhibitor tarsalisib, in combination with a CDK4/6 inhibitor and endocrine therapy in advanced breast cancer. Tarsalisib is a mutant selective PI3 kinase alpha inhibitor.
Intended to target the PI 3 kinase mutations in breast cancer while sparing normal PI 3 kinase 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 8 new oncology medicines or major new indications that are in Phase 3 trials or will start Phase 3 shortly. Moving to neuroscience. We completed the acquisition of AtaiBeckley, adding a portfolio of neuroplasticens 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 3 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 3b 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 MR511, a precision immunology therapy in Phase 1 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 movement 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 And I will turn the call back to David for closing remarks.
David A. Ricks
Chairman & CEO
Thanks, Daniel. We were pleased with the progress in Q3 and throughout 2026. Delivered another quarter of strong financial results, advanced our pipeline through Lilly Research Labs and business development, and started building 2 new manufacturing facilities in The US 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 redefine how a pharmaceutical company can improve human health, at a global scale. We have developed differentiated capabilities in R and D, manufacturing, commercial operations. Where we are engaging directly with patients through platforms like Lilly Direct.
Changing the way people access health care. 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 a major impact on global health For decades to come. And with 3-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 diseases, and deliver diversified, durable growth, for Lilly and our shareholders. Q3 was another strong quarter. Another step toward our long term goals.
Now I will turn the call over to Mike to moderate the Q and A session.
Great. Thank you, David. We would like to take questions from as many callers as possible.
So to that end, consistent with prior quarters, please limit yourself to 1 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 a question-and-answer session. If you have any questions, please press 1 on your phone at this time.
We ask that participants limit themselves to 1 question on today's call. If you have a follow-up question, please rejoin the queue by pressing star 1. Please pick up your handset while asking your question to provide optimum sound quality.
Please hold while we poll for questions. Thank you. Our first question today is coming from Christopher Schott with JPMorgan.
Your line is now live.
Great. Thanks so much, and congrats on all the progress. Guess bigger-picture 1.
You have raised guidance on the top line by roughly $10 billion year to date. I guess you are reflecting what is happening here just talk a little bit about what the biggest surprises have been as we think about US versus OUS, cash pay versus commercial, etcetera. And 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, Christopher, for the question. To talk a bit about guidance and our outlook for incretins in the future, we will go to Lucas.
Yeah, Christopher, thank you for your question.
And 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 we had in front of us for 2026. We talked about the launch of Foundayo in Q2. We talked about starting the Medicare bridge program.
And then, of course, we talk about the variable of the growth OUS, in particular, on the increasing 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 trends and the solid performance that we continue to see. 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 is you look at just the Inkredgen business, we are still scratching the surface on the number of patients that we can reach. You look at The US, and we are talking about 1 out of 10 patients that we are reaching nowadays, And in all US, we are talking about 2 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 for growth is still years to come from my perspective. And 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 Geoffrey Meacham with Citi. Your line is live.
I want to ask about what data you have on tirzepatide persistency in obesity just over the course of the past year or so. And 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, Jeff. To talk about tirzepatide persistency and obesity and thoughts on the pipeline looking in the future, we will go to Ilya.
Jeff, 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 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. And even in the self pay, we are seeing that close to the covered market. So the persistency actually for chronic medication, Zepbound is doing extraordinarily well.
Now expectations for oral, it is still early. But as typical chronic medications has as well as 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. 1 additional data point I think will be important 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.
So that will all play out as part of the different friction points, both in terms of out of pocket as well as the benefit that 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. So I am gonna do the nonobesity question. is actually starting to show the prospect of becoming a blockbuster product and, you know, starting to grow faster, maybe a little bit faster overseas. But you know, I was hoping, Daniel, 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 Carol. 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 the patient population. We have also seen a tremendous growth in the 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 office in the future.
As we look at Trailblazer-3, which is our study looking at prevention in cognitively unimpaired people, looking at prevention of 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 and 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, Carol.
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 1 here So clearly, the incretin franchise is becoming an enormous earnings driver, but also raises the question of what comes next.
When you look beyond the cardio. cardiometabolic disease, where do you see the best opportunity to build Lilly's next multibillion dollar growth pillar? And does recent BD activity suggests that neuroscience and immunology are emerging as higher strategic priorities? Thank you so much.
Great. Evan, for the question about the next big opportunity after incretin. So go to Daniel to talk about some of the pipeline opportunities he is excited about.
Yeah. Thanks, Evan. I would say that we are excited about all 3 of our other therapeutic areas, which are immunology, neuroscience, and oncology.
And the BD activity reflects just our strategic intent to grow those areas. But the intersection of that strategic intent with assets that are actually out there and that are attractive to us. Oncology is probably the space where we have made the most progress, we highlighted 8 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 are aimed to really grow that market on behalf of patients. And then finally, immunology. I think there is been a lot of crowding in immunology on a few probably important targets, but we also see 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, Daniel. 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 and how does that mix look different from others?
It seems by the majority of Medicare demand is injectable. I wonder if that surprised you with regard to your products in that space. And 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 channel.
Thank you, Kerry. I will go to Ilya to talk a bit about Bridge, the injectable versus pill split, as well as naive versus switches.
Yep. Thanks for the question. For Bridge, it 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 a low out of pocket.
And so all of those things combined, we have seen about 3 quarters, 75% of people coming into Bridge going into injectable therapy. 7 out of 10 in total choosing a Lilly medicine. And so we have performed really well across Bridge. That is higher than maybe some of the self-pay segment. 1 of the components of that is these same low out of pocket and getting the greatest efficacy and the standard care that is been established in obesity, has favored Zepbound in particular, But we are seeing good growth and uptake of orals and Foundayo as well.
In terms of expanding 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 therapy in the past. And so we see this as a significant driver of access long term, and it is still early days And 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 a 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.
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 is 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.
And then on the titration schedule, for Foundayo, the 2 lower doses still represent about 75% to 75% to 80% of TRx in recent weeks. So where do you see that going at steady state? Thank you.
Great. Thanks, Assad. I think we will start maybe with Patrik to talk a bit about some of the ex U. S. Launches and then Ilya will add maybe a couple of nuggets on The US as well.
Thank you very much. We have now launched in 4 markets outside The US. We started with UAE, very late in Q2, and the second half of Q3, launched in UK, Saudi, and Mexico.
I would say that so far, the launch is very much in line with our expectations. A lot of similarities with the learnings from The US in terms of 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 a geopolitical situation to take into account, but we are a market leader in UAE with competition from Wegovy.
In Saudi, we have launched in both type 2 and chronic weight management, and we have a good uptake there. UK, we have been subject to the pre vetting requirements by the MHRA. 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 6, a very good uptake and slightly above our expectations. But most importantly, I think we see that there is a lot of work to be done here.
We need to do all of the work that has been done in The US as well. We also recently got a CHMP positive opinion that should hopefully result in a regulatory approval by year end. And we are ready to launch a cross chronic weight management in type 2 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 2 reimbursement will take some time.
Yeah. And in The US, we have made significant progress since last quarter. You have seen over half a million TRx in the quarter, but 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 a number of trialists have more than doubled since last quarter. And so we are seeing good progression of adoption from providers.
And that is showing up in our shared markets. So our NBRx share of market is approaching around 4 out of 10. And so good progress overall for the growth of Foundayo in the oral segment and even in the sequential growth of orals within 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 percent of people are at 1 of our maintenance doses. that is actually higher than what you see on the Wegovy. And so we are encouraged by that.
Of course, that is something to continue to monitor, but the experience overall that we are seeing both from provider and consumer has been positive.
David A. Ricks
Chairman & CEO
I would just add we are under review for type 2 diabetes and we see that as an extraordinary opportunity for Foundayo as well. Remembering today in The US, roughly half the volume of GLP-1s is in diabetes. So that is a big market expansion.
Of course, 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.
Okay. Thank you all. Next question, please.
Thank you. Our next question is coming from Steve Scala with TD Cowen.
Oh, thank you so much. This is a follow-up to Christopher's earlier question. And with all due respect, Lily's financial guidance has not been a good predictor on ultimate results.
And I am curious, what is the most frequent source of the surprise? So, 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? And if it is the latter, why is that?
A key for investors, I think, is to determine when the surprise factor runs its course. So any color would be appreciated. Thank you.
Great. Thanks, Steve, for the direct question. We will go to Lucas to maybe provide a little extra color on guidance.
And David, if you want to add anything, feel free as well.
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's newspaper, you think about that again, are performing way much better than again, what we had initially guided to. But if you look at the runway of that growth across The US and 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 will start, the uptake of that as well.
The progression of all US markets both ensure and also penetration. And those all played out better than what we anticipated. So 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.
So I think from my perspective, we continue to drive again a very thorough every single quarter and be public about, again, the variables that could affect positively or negatively as well our guidance projections.
David A. Ricks
Chairman & CEO
Yes, Steve. I appreciate the question. You have followed the company a long time.
You know, our goal is to give as accurate a projection as we can. But, of course, you know, there is asymmetry with missing on the downside. that is, like, everyone's impulse. But let's remember, like, we are in the middle of the largest new category expansion in the history of the pharmaceutical industry.
And Lilly's leading that. So there is a number of things that have never actually happened before. That we are trying to project And you know, we prefer to, you know, give a posture that investors can rely on versus 1 that is more speculative.
And at the JPMorgan Conference at the beginning of the year, I said there is, like, 2 big variables this year. If I knew the answer to, we would have had a tighter range. 1 was the uptake in Bridge, which we did not really know. We were not even sure about the start time of Bridge at that point.
And 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 improving their health and losing weight at scale. And I think both of those this year turned out to be positive for us. Thus the roughly $10 billion improvement over first time guide You know, as time goes on, I suspect we will have fewer and fewer of those never before done things.
And the guidance can become more predictable. So appreciate the question. But, you know, that is sort of how I have seen it over the last 3 years.
And you know, we are we are beating on the up, and that is better than missing on the down. And I think that is good news mostly not because of the earnings beats, but because we are actually executing against a really scaled opportunity and performing well.
Thanks. Thank you, David and Lucas. Next question, please.
Thank you. Our next question is coming from Terence Flynn with Morgan Stanley.
Great. Thanks for taking the question. Maybe on the pipeline for Daniel. there is been a growing focus on longer-acting incretins.
You guys recently said you have 3 different programs in the clinic. So just wondering if we can expect any clinical data at the R and D Day on these programs or if you can tell us what the stage is of development because I think that is the probably, the only hole you have in your, incretin pipeline. Thank you.
Thanks, Terrence. We will actually go to Ken to talk about the long acting approach and if there is anything to share beyond what is been public.
Thanks for the question, Terrence. As we discussed previously, we do see an opportunity for longer acting incretins, particularly in a category that is big with such a consumer emphasis, we are taking the same approach usually do when we see an important square on the board that we want to fill, is we are baking off several competing platforms to see which 1 provides the best product possible. This is a space where we think the molecule properties are really going to matter, so 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 and we have other efforts that we have disclosed in business development around formulation Again, we will look at all these data and make an informed decision on which effort or efforts to advance to Phase 3.
Thank you, Kenneth. Next question, please.
Thank you. Our next question is coming from Shyam with RBC.
Hi, guys. Thanks for taking my questions. So as you look to 2027, what are you seeing in terms of in trends for GLP-1 coverage amongst the larger employers in The US?
And with those dynamics in mind and bridge continuing to ramp, could your US channel mix meaningfully evolve next year? So it potentially creates additional pricing pressure amongst the mid teens decline that you have absorbed in 2026. Or could we see pricing headwinds in the same range for 2027?
Thank you.
Thanks, Shyam. We will 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 is been noise around a number of employers opting out of coverage. At the same time, we are having positive discussions for our 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 will continue to have conversations to improve on that. The main access improvements overall for 2027 will most likely be predominantly growth of Medicare.
And Medicaid as opportunities for expanded coverage. That will have a segment mix more towards a lower price, a lower net price, not 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.
And in terms of commercial overall pricing, I would expect modest and disciplined approach around pricing and access to maintain. But overall stable on the commercial and increased coverage in Medicare and Medicaid.
Okay. 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. So your team's 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 ex U. S? Could we see more stability there than maybe investors expect? And how do you think about the net price per patient in The U. S. Versus international markets ex China evolving over time?
Currently seems quite similar. And, David, 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 have seen in The US so far. Thank you.
Thanks, Akash. Some questions for Patrik. So we will talk a bit about pricing expectations kind of on the cadence from here, thinking about net price US versus ex US, and anything about the emergence of a middle income cash pay market.
Yep. Thank you very much. You know what?
We have taken a very deep disciplined approach to pricing OUS. And I think we have seen that both providers, consumers and payers willing to pay for a differentiated product. And we have seen that even the launch of generics in India, Brazil, and Canada, holding our shares and continue to grow.
And that is a discipline that we will continue to apply. In terms of the out of pocket willingness, we are actually see quite a big willingness to pay out of pocket OUS as well. Of course, when market are getting further penetrated and like The UK, where we long more than 2 years ago, and where we have a penetration very much along the lines of The US.
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 2 reimbursement, which is very important And we made some progress in Q3 here now having 9 European markets covered, but we will continue those efforts and continue to take a disciplined approach in terms of pricing.
David A. Ricks
Chairman & CEO
Maybe just a comment on the ex US versus US. I mean, our goal because of the consumer nature of this, is to much tighter band of pricing on obesity medicines than maybe you have seen historically in other medicine categories.
Thanks, David and Patrik. Next question, please.
Thank you. Our next question is coming from Umer Faff with Evercore.
Morning, guys. I wanted to spend a quick second on a potentially sizable in the early breast cancer for Imlanestrant. I understand there is a planned interim for you guys.
A competitor trial stopped on interim. A, how should we think about early stoppage odds for your trial? And 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 CDK 4 penetration.
Thank you very much.
Great. Thank you, Umer. We will go to James 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.
And as you mentioned, the real big opportunities 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.
So 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 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 inhibitor, Verzenio,, which our study had and theirs did not. So a bunch of differences, I think if 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, James. Next question, please.
Thank you. Our next question is coming from Carter Gould with Cantor. Your line is live.
Great. Congrats on the quarter. Maybe just to go back to the Bridge program.
Have you had conversations with the admin or the various Plan D sponsors that give you confidence this program will either be extended or balance will be revisited in a different iteration. I guess the point just your confidence that there will not be a disruption at the end of 20 Yeah.
Thanks, Carter. Well, I will go to David to talk a bit about discussions with administration.
David A. Ricks
Chairman & CEO
Yeah. Well, I think we are pretty optimistic about expansion, I think, for 3 reasons, Carter. 1 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 kind of over indexed or under indexed. And I think if we look at the people using the medicines, relatively high BMI, comorbid people.
And that leads to the second point, which is cost effectiveness. And I think we highlight today the independent study from USC that estimates not just breakeven, but, like, massive cost savings for Medicare due to this program. CMS will, because it is 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 is a lot of energy with the people running CMS at 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 is probably a good conversation to have, on our Q1 call, that this to then shift to working with the carriers for the 28 calendar year.
And, you know, we will certainly work with the administration and all our partners who supply Part D coverage to have good access across our portfolio. And, you know, continue the success of the program so far.
Thanks, David. We will try to squeeze in 2 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.
So 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 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.
Thanks Mike for the question. Let's start with the size of the problem we are confronting here. 1 hundred and 10 million or so people living in The US with obesity or overweight. 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 have unique features and probably each of them can fill multiple roles. We talked about how Foundayo is a great on ramp for earlier in the 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. And then as we focus on retatrutide, this is a molecule that looks like it could do a lot of jobs on the high end delivering tremendous power. Lower end delivering a lot of simplicity and really differentiated responses in some important subpopulations, including men and type 2 diabetics, where it is the first agent that is ever shown greater than 2% or excuse me, 20 percent 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. And then last but not least, the Olora-TZP, 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 2 diabetes.
So again, of these agents we think they can play a lot of roles We probably cannot a priority stipulate 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 And overall, no matter which 1 they choose, they will still be on a Lilly medicine.
Great. Thanks, Kenneth. We will go to the last question, please.
Thank you. Our final question is coming from Kerry Holford with Berenberg.
Hello, 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 is 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 2 right now. Thank you so much.
Yeah. Thanks, Courtney. We will go to James 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, mentioned risk reward. Risk is really our friend here. Risk allows us to actually create value.
And 1 of the ways we can deploy that for the reasons we can is because we do not need revenue tomorrow. You know, I think, you know, 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 2 ahead, which allows us to take more risk in a calculated way. And some of that is very early stage deal making, which, you know, oftentimes are not really even press released by us.
So some of them, you do not maybe know as much about. And, you know, 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 derisking for us to feel confident that there is a real medicine or maybe more than 1 medicine there. And, you know, we can point to a handful of deals even on the year.
This year, that fit that paradigm. So, you know, you are. I think you will see more of both of those categories from us across all the therapeutic areas.
We are not solving for any 1 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 wanna take inside relative, to our peers.
So we have a pretty rigorous process to stay disciplined on a deal by deal basis, and excited about what we have done so far and what is to come.
David A. Ricks
Chairman & CEO
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, our December 7 Investor Day.
This will really be an R&D and pipeline focused day. We will have other sections in that as well. And I hope all of you can join us live or if not, remotely for that event.
Also wanna 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 6 or 7. 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 1PM today and running through 11:00 p.m. today and running through November 26, 2026. You may access the replay system at any time by dialing (800) 332-6.85 thousand And entering the access code 939 thousand.
International dialers can call (973) 528-0005. Again, those numbers are (800) 332-6.85 thousand And (973) 528-0005 with the access code 939 thousand. Thank you for your participation, and you may now disconnect your lines.
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