Quarter 1
Q2 2026 Earnings Call — August 5, 2026
Management: Thanks, Dave.
As a reminder, we would like to address as many questions as possible, but consistent with the prior quarters, please limit yourself to a single, one-part question.
Paul, please provide the instructions for how to join the queue, and we're 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 star 1 on your phone
at this time.
We ask that participants limit themselves to one question on today's call. If you do have a follow-up question, please rejoin the queue by pressing star 1 at any time. We also ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions.
Analyst Seamus Fernandez (Guggenheim): Thanks so much for the question. So, I really wanted to ask... on just sort of the increasingly deep position that Lilly is driving with consumers and how you envision expanding that treatment opportunity going forward. There's a number of different approaches that one could see Lilly taking across a more aesthetic-driven approach, but where do you see this consumer market evolving and if you could just maybe give us a sense of how unique or similar the U.S. versus the international self-pay market is at this point in time as you see it. Thanks so much.
Management: Some context on the consumer expansion. We'll first go to Ilya to talk about the U.S. and then Patrick can add some commentary about what we see outside the U.S.
Executive Ilya: Sure, thanks, Seamus. And I think the overall market, if you think about just obesity in general in the US and globally, we still have mid-single digit in terms of utilization or treatment of obesity. And so there's still a significant opportunity ahead of us to capture more patients in terms of access. You see a meaningful improvement in access with Bridge as well as some state Medicaid access going live or committing to next year. We continue to see significant growth even in Q2 and overall TRX coming in to treatment of obesity on 3 million TRX. A lot of that is driven by both injectable and oral on new patients coming in. And of course, we're seeing about 55% of overall prescriptions for ZEP bound being in self-pay and so we continue to look for ways to increase access and affordability, increase the consumer awareness and so we're putting a lot of efforts on consumer awareness and building out the need and urgency to treat and we continue to look for ways to expand our early direct offering and make it easy for people to get access to care.
Executive Patrick: Thank you. When we look at the obesity business outside of the U.S., it's still mainly out of pocket. So I think the consumer activation here is playing a significant role. and we have rapidly been replicating some of the practices from the U.S. outside of the U.S. as well. And we have launched versions of Lilly Direct outside of the U.S. However, it's important to take into account that regulations OUS differ and so will be different models that we will apply. But we will move quickly in this space. And I think they have one thing in common and that is to make sure that patients are being reached by safe and authentic Lilly medicines and we'll continue to lean in on those efforts.
Management: Great. Thank you both. We'll go to the next caller, please.
Analyst Asad Haider (Goldman Sachs): Great. Thanks for taking the question and congrats on the continued strong performance and execution. Maybe just on the Foundeo launch, in the U.S., the launch curve has been somewhat slower than anticipated. Just curious as to what you think the contributing factors are there and when you think we could expect an inflection. And then on OUS, just curious to hear any updated thoughts on how you're thinking about competitive dynamics and the launch trajectory. Novo is now also scaling launches for their oil bill in several key ex-US countries such as the UK and Germany. And in the UAE, I know you said you were encouraged by the early demand, but any learnings in terms of share dynamics now that Novo is in that market too? And they said this morning that they got 50% share within three weeks of launch. Thank you.
Management: Great. Thanks, Asad. We'll stick with the same deal here. Ilya, you want to start with talking about progress in the U.S. Foundeo launch, and then Patrick, you can add some color on ex-U.S.?
Executive Ilya: Sure. Thanks, Asad. So, you know, listen, for Foundeo, we're making pretty meaningful progress on the Foundeo performance and building out the brand. As we said from the start, we're focusing on three key areas. One is making sure we educate physicians on the Foundeo profile and building out that experience. The second is really achieving greater access and affordability for Foundeo. And then the third is building out consumer awareness. And we're making progress on all three fronts. So we're seeing the leading indicators being pretty positive overall. We're seeing week-to-week growth in overall prescriptions and uptake for Foundeo. And with building out, just if you take a look at the last 30 days, we've increased access with CVS, adding Foundeo in June. We've obviously, you've seen the launch of Bridge happening July 1, and we started the launch of our full DTC promotion campaign foundeo to build out consumer and physician awareness. And what we've seen in terms of overall growth and inflection is that the last week of July, we're seeing inflection. So the, we're almost doubling the volume that we had just a month ago. And we're starting to see new starts coming in nearly around one out of four starting on Foundeo. So we're starting to see an inflection point on Foundeo now and we continue to access growth and overall kind of HCP adoption. We believe that we'll continue to see growth in Foundeo over the coming quarters.
Executive Patrick: And OUS, when we looked at the first launch, we launched in UAE early May and we actually had a strong start and with early signals showing that orals are expanding the market. And similarly to the US, we see that most patients are actually naive to treatment with incretin. And patients are titrating up steadily. And when we look at the Lelius combined, incretin share held steady even if we had a second oral entering the market. When we look ahead, we have the approval in Mexico and Saudi and those are the markets where we will launch next. And most of the launches will come in 2027. But I think we are extremely well positioned here in terms of supplies. There will be no gating of launches either. Just in general, we need to have in mind that this is very early data, and there is a lot of noise in the data set. So I think when data are being referred to, it's very often sell-in data, and that takes into account all of the dynamics within Ventura Build. But on our side, very pleased with the start of the launch on the day outside the U.S.
Management: Great. Thanks both. Next question, please.
Analyst Courtney Breen (Bernstein): Lilly Thien, thanks so much for taking the question today. I did just want to probe on the Red or True Tide regulatory pathway. Dan, I noticed you mentioned kind of the BLA pathway, and I know that you've been negotiating perhaps challenging the FDA over the last couple of years in terms of that determination as to whether Red or True Tide meets the criteria for a BLA. Can you help us understand the requirements and milestones ahead in ensuring that this is accepted as a BLA and anything that kind of will help us understand whether this is going to be unique to RETA TrueTide or whether there are going to be subsequent incretins that are going to be able to get classified as a BLA going forward. Thank you so much.
Management: Thanks, Courtney. We'll go to Dave to talk about the RETA TrueTide filing pathway.
Executive Dave: Yeah, thanks, Courtney. As you mentioned, we've been pursuing this for a little while because we believe retratrutide is a biologic application, both in terms of amino acid count rule as well as analogous to a protein. So that's our position. There was a mixed decision in the first decision in the courts. Obviously, it's active litigation, but we would hope to come to a conclusion with the FDA to support a BLA application. As you may know, we have announced at the end of our clinical program that we have all the clinical data we need to submit. but we do need to gather a little bit more on the CM&C side. While that's going on, you could bet we're in communication with the agency and we'll give an update to investors as there's any progress on the filing status for regitutide. But super exciting data package. I think we're seeing really unprecedented efficacy with this triple acting GLP-1. We have a pretty large lead over any competitors with a triple acting medicine. and we pursued a very interesting, I think, package of comorbidities in both the initial package and now in subsequent data that we'll read out over the coming year or so. So very excited about the program and look forward to the submission by Q1 next year.
Management: Great, next question please.
Analyst Chris Schott (JP Morgan): Great, thanks so much and congrats on all the progress. I know it's early, but can you just elaborate a bit more on the Medicare obesity rollout and any learnings and surprises there thus far? Maybe as part of that, can you just touch on the ramp curve we've seen initially, what you're seeing in orals versus injectables, et cetera, just trying to get a sense of how you're feeling this is going so far. Thanks so much.
Management: Great. Thanks, Chris. We'll go to Ilya to talk about the Medicare GLP-1 bridge rollout and any context on orals versus injectables.
Executive Ilya: Great, thanks, Chris. You know, we're really excited about, one, expanding access for seniors in the U.S., as David mentioned in the early part of the call, that it's increasing access to about 35% more Americans being able to access obesity therapy. If you think about the start, it's still early days. At the same time, we're seeing a pretty significant inflection point. You know, we're closely on, with CMS on educating physicians and different stakeholders, pharmacies, on the criterion process. That process is working pretty well in terms of the prior authorization and approvals of people that qualify. And so the criteria are clear. We're continuing to do pretty extensive education across consumers, physicians, and pharmacies to understand the criteria so that they know whether or not they can benefit. and we've also enabled Lilly Direct to fulfill on the Bridge process. And in terms of momentum, you can see an inflection point for both of our medicines, ZetBound and Founday, over the last few weeks.
Part of that is Bridge. The approximate, we're seeing a significant preference towards injectable, probably around 80% of people that are getting treatment are injectable, but we're seeing new patients for both. And we approximate around 60% to 70% being new people that are coming in that have not had access before. So it's still early days, but we're encouraged by the inflection point over the last few weeks, and we'll continue to work on educating consumers and stakeholders on the benefit of the BRIDGE program.
Management: Great. Next question, please.
Analyst Jeff Meacham (Citibank): Good morning, everyone. Thanks for the question. I also wanted to say congrats on the quarter. I had two related ones on Reta Trutide. The first one is, do you need a commercial strategy to protect against whatever it is that's apparently available today, or will that solve itself with formal approval? And then related, you guys have expanded the indication base for terzapatide well beyond With the higher efficacy of Reta-Trutide, are there additional indications that you can now address that otherwise perhaps you couldn't? Thank you.
Management: Great. Thanks, Jeff. We'll go to Ken to talk about the development strategy on Reta-Trutide and then any comments about commercial strategy as well.
Executive Ken: Thanks for the question, Jeff. First of all, I think people are eagerly awaiting authentic Reta-Trutide to be available in the market and we fully expect that when we get this to medicine to market, people will vote with their feet and embrace and the really guaranteed product. In terms of development strategy, what we do have a broad base with Terzapatide of indications, with RETA we're seeing in terms of really transformative weight loss. At the high dose end, it does open up additional opportunities. You've seen that with the data we've shared on osteoarthritis knee pain, both from Triumph 4 and Triumph 1, where you're effectively reducing pain by unprecedented amounts, 75%. I think that's exemplary of the sorts of opportunities we have ahead with this molecule. We're also advancing it in a study in MASH, or Masl-D, which is ongoing, and then, you know, which we think the glucagon mechanism of action there offers some potential unique opportunities. But we're also evaluating several additional indication opportunities here internally and may have more to say in the future on that. Last, I'll circle back to pain.
We also have a chronic lower back pain study ongoing with RETA, which you'll read out sometime next year. So overall, very exciting medicine that we think can do a lot of work in the treatment of obesity, both on the high end with bariatric surgery like weight loss and on the low end with just the simplicity of a single titration step. We'll look to expand the indication set and really maximize those opportunities.
Management: Great, next question please.
Analyst Mohit Bansal (Wells Fargo): Great, thank you very much for taking my question and congrats on the progress. I'll ask a non-increditing question for extra credit. So, for breast cancer, I would love to understand how you are thinking about the post-fusenio strategy in breast cancer at this point. You have SARD, you also have oral PI3K, so is there and all oral combo on the table as well. Thank you.
Management: Great, thanks Mohit and extra credit duly noted. Jake, we'll go to you to talk about the breast cancer strategy after Fresenio.
Executive Jake: Yeah, thanks Mohit for the question. We're really excited about the presence that we have in breast cancer historically and going forward. I think the three most important targets in breast cancer are the estrogen receptor, CDK4-6 and PI3 kinase alpha. We think we have a strong position in all three areas. We envision absolutely combining in Lireo and even in the existing study will be combined with investigators' choice of CDK4-6, a large part of which I think will be for Xenio. So we're really excited about the potential for that all oral combination in a variety of settings down the road.
Management: Great. Next question, please.
Analyst Akash Tiwari (Jefferies): Hey, thanks so much. So it seems like your guidance is almost implying a deceleration in REVs versus Q2 for the back half of the year, and that seems unlikely given the Medicare bridge programs ramping up along with Foundeo commercial access getting online. Is there anything we're missing here maybe on price, or is your team generally trying to be conservative here? Thank you.
Management: Thanks, Akash. We'll go to Lucas to talk about the moving parts and guidance.
Executive Lucas: Thank you, Akash, for the question. Maybe a few parts. Very pleased, by the way, to continue to see the strong performance that we see not only in the first half of the year, but also upgrading the guide by $2.5 billion for the full year. To your point about what are the ins and outs on the guide, I think it's worth to highlight in the last couple of quarters that there were a few one-offs that we call it out in the calls as well, period adjustments that we have on our estimates for rebates and discounts in the U.S., including this quarter. Those, of course, we don't expect that will continue into the second part of the year. So that's something that once you look at the models, it's important to factor that. Then you mentioned the comparison in terms of growth versus last year. What is important, if you look at the base period, the 2025 period, remember that in the second part of the year, basically, we had all the bolus of the launches of Monjaro in all U.S. markets.
That was basically adding a lot of, again, new countries and volume into the second part of the year. When you look at actually the growth that we expect to see in dollars, not in percentage of growth, we expect to continue to drive significant growth in the second part of the year as well. Of course again that bolus of new countries as all along I highlighted has already happened will not happen again and as Patrick alluded as well the growth that we expect to see in the future is more driven by the penetration in the OUS market so those are some of the factors that is important to highlight last but not least again I know that some of you are fans of the seasonality effects and I think it's worth to highlight that as well we always have the seasonality in Europe in Q3 with all the vacation holidays taking place and that's factored in our guide. And usually we have some seasonality in type 2 diabetes in the U.S. in the fourth quarter. So those are some of the one-offs that I think is worth to call out as part of that we have been factoring in our guide.
Management: Great. Next question, please.
Analyst Michael Yee (UBS): Thanks. Talking about the strong OUS launch, can you talk a little bit about which specific regions are seeing the most growth? and make a comment about India where I know there's a lot of noise about generic launching. I know there's some capacity constraints as Reddy has made some comments. So maybe just talk about what you're seeing specifically there as well, even with generic launching. Thanks.
Management: Okay, great. I assume we're talking about Manjaro. So Patrick, we have to talk about the OUS launch in Manjaro, kind of pockets of strength, and then any early observations of generic semi-glutide in India or other markets.
Executive Patrick: So when you look at the performance of Monjaro US, we actually continue to perform very strongly, more or less everywhere. And we have taken a market leadership position across many different markets. But among the key drivers, I would highlight the China NRDL, where we obtained the category leadership already after 16 months. But beyond that, we see significant growth in Korea, the UK, Mexico, and Germany. And in many markets, we have a market share today very similar to the level of the US or even above. In terms of learnings from the launch of generic semaglutide, if we look specifically at India and even Brazil, we continue to see TRX growth for Monjaro even after the launch of generic semaglutide. and I think that's driven by the strong differentiation we have with the superiority data and I think that's the first line of defense. But we have also been pleasantly surprised with what we see in Canada where actually the hirsupatide TRX continue to grow with the same pace as a total market TRX and we have also seen the generic companies actually having significant supply constraints. So I think that's something that we need to monitor very closely. but in an essence, strong performance across the globe, outside of the U.S. and so far, the differentiation of TIRS hepatitis seems to be a strong line of defense and most importantly, our overall product portfolio will position us very well in the future as well here.
Management: Great. Next question, please.
Analyst Terrence Flynn (Morgan Stanley): Great. Thanks for taking the question. Just on Foundeo, I was wondering if you could... provide any insight on how extensive your sampling program is and if that's having any dampening effect on the IQVIA prescription data that we're all watching every Friday. And what are you seeing on the U.S. prescribing base here? Are you seeing some expansion and can you quantify that for us? Thank you.
Management: Great. We'll go to Ilya to talk about Foundeo sampling and U.S. prescribers and Terrence's Fridays.
Executive Ilya: Yeah, so on sampling and in general, like our full promotion, we've got pretty much every lever going on in terms of promotion. Sampling, we're incorporating the sample, the first 30 days of the first dose, pretty much similar to what you would see for a typical oral small molecule in the retail market. So we have extensive sampling across the prescriber base and we continue to have full supply to enable to do that, to get that first experience and understand the benefits and safety of Foundeo. In terms of prescriber base, we've seen a pretty good uptick and continued growth in the number of prescribers. The last time we talked on earnings, we talked about about 8,000 prescribers. We've now increased that to 36,000. Prescribers, and so we continue to see week on week in continued progress on the adoption, awareness, and the improved perception of Foundeo profile for people living with overweight and obesity. So we feel pretty good about going forward inflection points with increased access and consumer awareness.
Management: Great. Next question, please.
Analyst Umair Rafat (Evercore): Thanks, guys. I have a question on net pricing and obesity, if I may. So, as you know, Zebb Bounce net price is about $580 per prescription, which is meaningfully higher than the cash pay price, but also higher than Wigovi net price of about $380 per prescription. So, Dave, last quarter you mentioned there's a lot of medical exception that might be driving some of this delta. And my question is, how sustainable is that, especially given CVS is back on formulary? And is this what drives the favorable rebate adjustments quarter after quarter? Thank you.
Management: Thanks, Umar. We'll go to Lucas to talk a bit about net pricing on Majara or ZepBan and any of the net exception dynamics.
Executive Lucas: Yeah, Umar, thank you for the question. Maybe just to anchor this back on the prices on ZepBan, different to many other molecules, by the way, there is a lot of transparency on all the different channels and you have all the access to see that data starting with Lilly Directon, direct to patient prices. Again, you know that is starting point at $299 all the way to $449. Now you have the bridge program at $245 as well. And of course, again, you have then the commercial price, again, that is part of this equation. You mentioned medical exception. That's a driver. I think when you factor on your analysis as well, it's important to highlight again the size of the scripts as well. That is another driver that is affecting the price component, in particular in that commercial segment price. It's impacting, of course, again, the price. You can then try to extrapolate what is the price per pack that is significantly lower than that. In terms of medical exceptions, yes, there are a few buckets. You mentioned one of them.
For example, again, the template on CVS access that we are very happy that we accomplished now starting in Q4 will drive basically, as you know, since last year when, again, CVS moved to 101. There were three options basically for the patients back then. One was to move to the competitor product basically. The other one was to go to the cash market and the third one was to go through the medical exception process going back to your point. We are happy actually and now all along our goal is to have access. The medical exception is maybe a short term thing and our all along view is to have open access for all the patients so expect that price will actually go down for sure because of this but it's very much embedded in our guide and it's basically reset on again our expectations and of course we are going to more than offset that with volume growth.
Management: Next question please.
Analyst Jason Gerbery (Bank of America): Hey guys, thanks for taking my question. Mine's just on M&A. You guys surprised investors, I think, getting back into psychiatry and with some vaccine deals. And so I'm wondering if you think these two areas, psych and vaccines, are areas that, you know, really can scale and is this high priority or do you see some of the assets as more one-off or you're just intrigued by the science? So just wondering if you can kind of characterize the strategy there. Thanks.
Management: Great. Thanks, Jason. We'll go to Jake to answer the question more broadly about the M&A strategy and all the work we're doing there.
Executive Jake: Yeah, thanks for the question. I think what these two areas have in common is just the immense unmet need that still remains. And that really is the through line of all of the work that we do both internally and through business development. So, you know, in this case, we saw an opportunity to acquire technology and medicines that we think have the potential to be really impactful and at prices that allow us to remain disciplined and create value long-term for Lilly shareholders. It's not actually that different, frankly, than the many other deals that we've done year-to-date and the internal projects that we continue to pursue. Whether we continue to build more around infectious diseases and psychiatry specifically, to your question, I don't want to forward too much on that because we'll be opportunistic based on what we see that's available for acquisition and partnering. Very excited about those two areas and the specific things that we purchased there.
Management: Great. We'll try to squeeze a couple more in if we could. The next question will be from Louise Chen from Scotiabank.
Analyst Louise Chen (Scotiabank): Hi. Thanks for taking my question. I wanted to ask you about some of your other pipeline products outside of obesity. I know you've put a lot in there. Any specific assets, you know, one or two that you're really excited about that you think the street should be paying more attention to? Thank you.
Management: Great. Thanks for the question, Louise. We'll go to Dan to talk about other pipeline projects outside of obesity and any couple you want to highlight.
Executive Dan: Yeah, thanks for the great question. We have a rich pipeline outside of obesity. Maybe I touch on some highlights by therapeutic area. Maybe starting in cardiovascular health, I mentioned the efforts we're doing in ASCBD with gene editing for PCSK9. We also have an oral and an injectable LPA lowering drugs. Those are huge opportunities. We just commented on some of the new areas. Jake mentioned psychiatry and vaccines, also huge unmet areas. In neuroscience, beyond the psych expansion, we're excited about sleep-wake disorders with Sintesa and then diseases like addiction, major depressive disorder, which may be addressable with Inkerton science as well. So a lot of and a lot of growth going on in neuroscience as well. And then they come to oncology. I highlighted some of the exciting readouts. It's probably the richest period of oncology readouts and molecule delivery that we've had at Philly ever probably. I'm excited about a number of those molecules, including the two recent deals that we announced, the Colonia in vivo CAR-T idea for multiple myeloma.
That's a thing that has a huge potential against a large unmet medical need as well as the AJAC novel, AJAC inhibitor. and then finally in immunology, I commented on some of the progression that we're having. It's still early days, I think, in watching what this drug can do, excited to see it grow in the marketplace and then new indications coming and new opportunities to continue to grow there in one of the largest segments of immunology right now. and then behind that, a number of combination ideas coming in IBD as well as psoriatic diseases. So across our therapeutic areas, we have the strongest pipeline we've ever had. If you eliminated kind of the incretin stuff, this would be a really strong and large pipeline to be proud of.
Management: Great. Thanks, Dan. Paul, we'll do one last question and then we'll close the call.
Analyst Dave Reisinger (Lyric): Great. Thanks very much. So congrats on the phenomenal results. I just wanted to ask about Foundeo XUS. So sales in the quarter in a single country, albeit a wealthy one, the UAE, were $31 million. which was close to half of the 67 million that Foundeo generated in the U.S. So although the pricing is probably relatively high in the UAE, the results would seem to suggest explosive potential for Foundeo once it's launched throughout the world. Could you comment on how you see its potential XUS for obesity and then separately, How do you see the opportunity for Foundeo to be paid for by ex-US governments for diabetes? Do you think it will be better reimbursed than Terzepatide is simply because you can offer it much cheaper to governments for diabetes than you offer Terzepatide? Any color would be helpful. Thank you.
Management: Great, we'll go to Patrick to talk about Foundeo Obesity Expectations, XUS, and then any color on thoughts on diabetes launch and reimbursement.
Executive Patrick: Thank you very much. As I shared earlier, we are encouraged by the start in UAE, but also we need to consider that it's very early days and there is a lot of noise in the data. And as always, when you launch a new medicine, there is an inventory build in the beginning as well, although there is a lot of demand created as well. What we have learned so far is that there is a need for an oral in treating both obesity and type 2 diabetes. And I think we have seen that the majority of the patients are naive to incretin treatments. So I think there is a significant opportunity ahead of us to capture more patients in terms of access.
Quarter 2
Q1 2026 Earnings Call — April 30, 2026
Management: Thank you, Dave. We'd like to take as many questions as possible. So consistent with prior quarters, please limit yourself to a single one-part question. Paul, please provide the instructions for how to join the queue, and then we're 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 star 1 on your phone
at this time.
Again, we ask that participants limit themselves to one question on today's call. If you do have a follow-up question, please rejoin the queue by pressing star 1 at any time. We also ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. And please hold while we poll for questions.
Analyst Name (Firm): The first question today is coming from Jeff Meacham from Citi. Jeff, your line is live.
Analyst (Citi): Hey, guys. Congrats on the quarter. Thanks for the question. Maybe this one is for Dave. You know, investors seem to be acutely focused on pricing in incretins with not a lot of emphasis on volume. I know you don't want to get too specific, but when you talk about, you know, at a high level, the margins under a wide range of price scenarios for For Lily, how do you see the investments you've already made in, say, manufacturing, and how does that add to the dynamic and what that means in terms of the competitive mode? Thanks.
Executive Name (Title): Great. Thanks, Jeff. Dave, do you want to talk about pricing and anchor towns?
Executive (Title): Sure. Thanks for the question, Jeff. Maybe a couple things to point out now that we're five or six quarters deep into this sort of post-shortage world, and we can really pursue expansion on volume in an aggressive way. I think you can see something It's a little different about the obesity and weight loss category from what we think about in other pharmaceuticals, where the barrier is typically more informational, not price sensitivity. But here, clearly, because of the out-of-pocket nature, 75% of ex-U.S. business for Montero is out-of-pocket. U.S. is a meaningful portion as well. We see quite expansionary volumes, perhaps nonlinear, to price reductions. Of course, there's a floor on that, and we have sensitivity on our cost structures, et cetera. But pretty much every time we reduce pricing, we see a pretty large expansion. You also see built into this the primary pricing affecting Q1 are actually negotiated outcomes with governments, both the MFN package we negotiated with the Trump administration, your cut out-of-pocket costs, you see strong growth. Like Lilly's Upbound Biles really had quite a strong quarter in Q1 at slightly lower prices.
And then in China, we negotiated for diabetes access and a meaningful price reduction, but you can see the volume far outstripping the price concession. So kind of a different dynamic. And I think if investors can think about this category, perhaps unlike other pharmaceutical categories in the past, you know, in terms of margin sensitivity, it remains true that, you know, for this category, for us at least, the unit economics are really driven by fixed costs that are either sunk in the past or unmovable depending on the volume in the present. And as a result, you know, both covering the amortized R&D costs as well as CapEx is a concern from an accounting perspective. But at the margin, we do have latitude. You know, that said, we want to invest in future medicines. And I think that's probably the biggest, as we've said before, as we think about long-term operating margin for the company, you know, the X factor. If we have good projects, we won't hesitate to invest in them, whether it be existing medicines. I think you see kind of a record load of phase three Nilex at Lilly right now, or for new medicines.
And we've got a very full phase two and phase one pipeline that we are deploying capital against. So we've got a lot of latitude here, Jeff, and I think this market works a little differently, and we're all sort of just getting used to that. But I think good news for Lilly in our incumbent position.
Management: Thank you, Dave. Paul, next question, please.
Analyst Name (Firm): The next question will be from Chris Schott from J.P. Morgan. Chris, your line is live.
Analyst (J.P. Morgan): Thanks so much for the question, and congrats on the progress. I just wanted to dig a little bit more into international Manjaro. And can you just share some of the learnings from, I think it's been a much better expected launch than we all had anticipated here, as we think about the ramp going forward and longer term opportunity. And maybe as part of that, can you just, should we expect any impact to the ramp from the entry of generic SEMA in select markets? Or is this such an early stage of penetration where that's less relevant? Thanks so much.
Executive Name (Title): Great. Thanks, Chris. For the question about international Monjaro and the potential impact of generic SEMO, we'll go to Patrick.
Executive (Title): Thank you very much, Chris. You know, when we look at the first quarter, it's truly a strong growth of all our prioritized products across international, but of course, particularly Monjaro. And now we have fully launched in more than 55 countries, and we have seen a very strong speed of uptake and also a rapid market share gain. Also in the market, we launched the second half of 2025, referring to Brazil and Korea, where we currently have an estimated market share of 60%. And of course, also the China Type 2 NRDL reimbursement. When we look at the generics, we only have a few weeks of data from India. But it seems like it's really stimulating the growth in the overall obesity market. And that includes our product. And the Monjaro has actually been holding market share quite nicely. When we look at the Monjaro prescriptions, they are about 10% higher in recent weeks compared to the period prior to generics entered. So I think it just underscores that dual agonists Trump's single agonist. Moving forward, I think we should expect a very strong continued year-on-year growth and some sequential growth.
We saw in the slide earlier that we have a market share above 53% OUS, and that's an average. And in many international markets, we have a market share along the lines of what we see in the US with SEPA. And when you get to that level of share, incremental share gain is getting harder. And, of course, we will focus our efforts on patient activation, driving increased penetration in the chronic weight management market and market growth. And also, secondly, what we have seen during the second half of the year has been some seasonality, mainly driven by the holiday season in Europe, where patients tend to take a drug holiday break or actually delay that initiation of the new therapy start. But overall, strong growth across regions. Seems like generic semaglutide is stimulating market growth, and we continue to do well. We expect a continued strong year-on-year growth, sequential growth driven by patient activation.
Management: Great. Thank you, Patrick. Next caller, please, Paul.
Analyst Name (Firm): The next question will be from Seamus Fernandez from Guggenheim. Seamus, your line is live.
Analyst (Guggenheim): Oh, great. Thanks for the question. So really, we just wanted to get a better understanding of how the market, as you see it, is starting to segment and could segment going forward. More as you look forward to the potential introduction of Reta True Tide amidst the Foundio launch, as well as then the follow-on to that being the LRL and Tunch. Where do you see the market really opening up with each of these potential assets reaching forward? Thanks so much.
Executive Name (Title): Great. Thanks, Seamus. For that question, we'll go to Ken to talk a bit about the portfolio and how we see the market segmenting.
Executive (Title): Yeah, sure. Thanks for the question, Seamus. I think it's reasonable to expect in this large and growing market and opportunity in obesity that with, you know, the number of patients around the world living with overweight or obesity numbering perhaps in the billions, that many of them are going to want different types of medicines that are tailored to their individual needs and preferences. We're in early innings in that regard. We're now sort of bringing the third segment, I guess, in. We've had GLP-1 single agonists and then dual agonists and now oral medicines, but we see many other sort of plausible opportunities to tailor medicines to different groups. As you noted, retichutide is one of those ideas which very obviously could play to individuals who are seeking greater weight loss, although I will say we see opportunities for retichutide elsewhere and across the spectrum of obesity. Eluralentide, we can position that a few ways based on the Phase II data that we've seen.
The first of which is that this could be a great medicine for patients seeking a non-GLP-1-based mechanism, perhaps due to tolerability they've experienced or tolerability that they're fearful of. It may also be a good drug that could be added on top of existing incretin therapies to provide incremental weight lowering. But there's many other ideas out there Lilly's investing in. That includes medicines that could be dosed even less frequently, perhaps those that dial in additional metabolic benefits, and maybe some that are sort of ultra-long acting using genetic medicine approaches. We see all of these as compelling ideas, and we also feel we're in a leading position in most, if not all, of those spaces. You know, in terms of how the market will ultimately shake out in terms of percentage of use across those different ideas. It's hard to prognosticate that, but many of these ideas are tied to common manufacturing platforms, and we're making the investments to support any of them, should they prove to be really the most favorable option for managing the overweight and obesity.
Management: Great. Thank you, Ken. We'll go to the next question, please, Paul.
Analyst Name (Firm): The next question will be from Alex Hammond from Wolf Research. Alex, your line is live.
Analyst (Wolf Research): Good morning, guys. Thanks for taking the question. On Medicare Access, can you walk us through your strategy to activate these patients? And when do you kind of see this playing out in terms of either maybe a 4Q dynamic or more of a 2027 as these patients pull through? And I guess as well, with the attractive price point, how do you think about persistence in this population?
Executive Name (Title): Okay. Thanks, Alex. For the question about Medicare access and sort of staging over time, we'll go to Ilya.
Executive (Title): Great. Thank you for the question. Obviously, we're excited about having Part D access starting to activate for obesity medicines starting in July. In the way that we think about it, there are millions of R&D beneficiaries that are eligible. And so the path to that with having a long trajectory with a big program of not only starting in July but all through 2027 is an important aspect. Obviously, that will take time to build. We need to have the education across physician-based pharmacies as well as consumer-based to understand the full path of different medicines that we have and available for treating obesity. And so that'll be a gradual path in 26 as it starts and then continued growth in 27. And obviously the $50 a month copay is an important element of affordability for seniors. We've already seen for ZepBound as well as Manjaro that they've had great persistency overall relative to other chronic conditions. And we continue to see that. Obviously, the $50 copay and affordability will only just add to that in addition to all of the health benefits and experiences that people will have over time. So we're excited about expanding access very soon.
Management: Great. Thank you, Ilya. Next question, please, Paul.
Analyst Name (Firm): The next question will be from Evan Siegerman from BMO Capital. Evan, your line is live.
Analyst (BMO Capital): Hi, guys. Thank you so much for taking my question. Bigger picture, strategically, as you think about the next levers of growth for the business, what do you need to see from either the INI, neuroscience, or oncology franchises to kind of match the scale of the obesity metabolic businesses or particular assets? Is it BD or something else? Thank you.
Executive Name (Title): Great. Thanks, Evan. We'll go to Dan to talk about some of the important programs that he's focused on to drive growth in the future.
Executive (Title): Yeah, thanks, Evan, for that question. And it's an important one to us. As far as you're asking about scale, but I point out in growth rate, those businesses are growing extremely fast. Even without the obesity and metabolic business, Lilly would be the fastest or certainly one of the fastest growing pharmaceutical companies in the industry. So we're proud of what we're doing in those three areas. And I think each of them has very significant unmet medical needs that we can scale into as our medicines are successful. So we like what we got. We like the direction we're going. Of course, in each of those areas, we also see opportunities to get a lot bigger, and we've highlighted some of the themes already in those areas. You'll also see us address some of that through business development. So, for example, the Sintesa acquisition allows us to play in in a new area here in sleep-wake medicines. The WARNA acquisition allows us to play in new areas of immune reset, for example.
Management: Great. Thanks, Dan. Next question, please, Paul.
Analyst Name (Firm): The next question will be from Asad Haider from Goldman Sachs. Asad, your line is live.
Analyst (Goldman Sachs): Great. Thanks for taking the question, and congrats on the continued strong execution. Maybe just going back to Fundayo, appreciate all the color on early launch dynamics, which is sort of playing out along the lines of your messaging, that the initial launch trajectory is going to live below that of oral Regovi, but then there's going to be an acceleration as we move into the back half of the year. So just now with a few weeks of launch under your belt, I think you said 15,000 patients have started taking the drug already. What's your level of confidence on that launch curve framing in the context of the early experience? And then Related on the guidance range, are you able to provide any high-level commentary on what type of contribution was factored in for Fundayo, recognizing that you said that the revised range reflects mainly the strong underlying performance of Manjaro and Zepan? Thank you.
Executive Name (Title): Great. Thanks for the question, Asad. Ilya, do you want to talk about some of the early launch metrics that you're tracking and the feedback you're hearing, and then maybe just a short comment from Lucas about the guide?
Executive (Title): Sure. Well, first, it is early days, but we're pretty pleased with the trajectory and encouraging first start to launch. Obviously, we just started active Salesforce promotion just over a week ago, having broad availability in the supply channel just two weeks ago. Really, we're encouraged by the initial leading indicators. And the way that we think about it, there are probably three key factors and catalysts of growth. And those three are, one, growing the familiarity among healthcare providers, on the clinical profile of Foundeo, building out the access and growing the awareness of Foundeo with consumers. And we're making progress on all three fronts. And so on HTPs, if you think about the early indicators, we now have over 8,000 prescribers of Foundeo, a third of which who have not previously written an oral GLP-1. And so this is expansive. And the current sentiment so far, what we're hearing is really positive on the overall efficacy and kind of the no-hassle factor on a daily oral GLP-1. So that's an important aspect.
We'll continue on the execution related to HCPs around sampling, continued promotion through our sales force, as well as educational seminars, and we're fully in the field with our promotional efforts with HCPs. So good progress there. On access, we've confirmed commercial access at two of the large PBMs by middle of May, so just in a couple of weeks, and To the earlier question on Medicare, Medicare access will start at the beginning of July. And so those are continued catalysts of growth upcoming in the next couple of months. And so we see that as an important unlock and expansion as well. And then on the third piece on consumer front. We now have just over 20,000 patients treated to date. And one important element there is that 80% of those found AO prescriptions are new to class. So this is expansive in bringing new people into being treated for overweight or obesity. We've done a number of aspects already around the direct-to-consumer on digital, on social media, and others. But obviously, we will continue those efforts on a full-scale direct-to-consumer and TB launch in Q3.
Important there is just to ensure that prescribers have familiarity around the profile of Foundeo before we do that. So bottom line, I think we're pleased with the progress. Early indicators are positive and moving in the right direction, and the trajectory will build over time. This is a new brand, new medicine that we're bringing to the market. So we're pleased and ready to go. Maybe on the second part, going to the guidance, just to highlight a couple of things. Of course, again, the increase on our guide is driven by the strength of the entire portfolio that we mentioned during the call, starting, of course, with the Incretin portfolio, both in the U.S. and OUS. In terms of Fundello per se, you've heard already from Ilya about how we continue to see progress and very encouraging feedback that we hear from payers, physicians, and patients as well. We set up the plan at the beginning of the year, and it's very early days. We have three weeks of data
at this time.
So it's tracking to our expectations, and we will continue to see how this progresses over the year. But we feel very confident on the trajectory that we've seen so far.
Management: Great. Thanks, Lucas. Paul, next caller, please.
Analyst Name (Firm): The next question will be from James Shin from Deutsche Bank. James, your line is live.
Analyst (Deutsche Bank): Hey, good morning, guys. Thank you for the question. This one's for Dave. With Bridge extending into 2027, Dave, what's next for balance? Is Lilly working with stakeholders on revisions to secure longer-term Medicare access? Thank you.
Executive Name (Title): Thanks, James. Dave, do you want to share a few comments about the Bridge balance dynamics?
Executive (Title): Sure, yeah. Look, when we signed the agreement with the administration, we all knew Bridge was going to be put in place because it was a mid-year launch. And we had understood at the time that there was a commitment to 27 if, as a contingency, the Part D plans did not choose to opt in at a certain rate. Of course, we now know they didn't. And maybe that's not so surprising. You know, they operate on their margins. There's been other disturbances and market events in the Part D program, for instance, the IPA products, et cetera, that have changed their economics. And unfortunately, I guess, not being a part of those discussions, but they couldn't cross with the major players for calendar 27. So the government's doing what they said, and they're extending bridge. I think for manufacturers, there's some puts and takes in that, but the fact that there'll be access to the consumers at $50 a month, I think is a very compelling proposition, as Ilya highlighted before, will drive great persistency. And in an 18-month window, I think we will start to see growth population-level health improvements if these are used at scale. That will then set up the 28th discussion.
I would expect the government to lean hard into getting Part D plan participation in 28 and normalizing obesity care as a standard preventative treatment and something that should be used to treat comorbidities of obesity within the senior population. We may have the evidence to support that as we exit 27. It may need a little more time, but I think they're going to push to help make that happen. And I think that normalization is overdue in the commercial market, so it'll be a good leading indicator for us across the U.S. business. We'll continue to work with the government closely through that period and, of course, try to work with them to activate patients and make sure they can find success on our medicines. So stay tuned. Probably more news as we exit 27. 26 on the actual 28 plans.
Management: Great. Thank you, Dave. Next question, please, Paul.
Analyst Name (Firm):
The next question is coming from Mohit Pansal from Wells Fargo. Mohit, your line is live.
Analyst (Wells Fargo): Great. Thank you very much for taking my question, and congrats on the progress. I just want to touch upon the Employer Connect program that you are embarking upon. So it seems like the insurance, commercial insurance, has been relatively stable year over year. So this seems to be the way to grow it. And employers are worried about, you know, their costs long-term and everything. So we'd love to understand what are the steps to convince employers to buy into the Employer Connect program and the mechanics of it. Thank you.
Executive Name (Title): Thanks, Mohit. Ilya, do you want to make a few comments about Employer Connect and the progress and focus?
Executive (Title): Sure. Thanks, Mohit. Yeah, listen, as you mentioned, the overall commercial access has been pretty steady around 50% and one of the key aspects that we're excited about is having a employer connect platform where we work with a number of third parties to actually go out and talk to different employers about the value of covering obesity care but there are several things that are a little bit different with our employer connect program one is a transparent price that is known and to all of the employers, and providing the flexibility and design around the employer-employee contribution towards obesity coverage. And so we do think that this is a positive element to increase the number of employers to opting in. Obviously, the selling cycle and the timeline for making decisions for 26 has already passed. So while we are currently having positive conversations and positive feedback from employers around this new platform that will most likely have a gradual impact in the back half of 26 and most likely incremental opt-ins for 27. And then as part of that, obviously there's more data on real-world evidence and also components of where employers do cover what are the benefits to their employees overall, both in their health and productivity over time. And as that data comes out, that will only reinforce the positive decision to provide coverage for obesity care.
Management: Great. Thank you. Next question, please, Paul.
Analyst Name (Firm): The next question will be from Terrence Flynn from Morgan Stanley. Terrence, your line is live.
Analyst (Morgan Stanley): Great. Congrats on all the progress. I had a question broadly. You talked to the portfolio that you're going to be, you currently have, but you're also rolling out across the Ingridton area. And so as you think about the evolution, I guess, of the DTC channel, what are some of the things you're considering to kind of leverage Lilly's scale in that channel? And then also anything that you think will help there from a commercial side in terms of driving additional coverage in terms of having scale across the portfolio? Thank you.
Executive Name (Title): Thanks for the question, Terrence. We'll go to Dave to talk a bit about the portfolio strategy and leveraging DTC.
Executive (Title): Sure. And Ilya and Patrick can jump in here. I think you're pointing out something that has evolved and been developing part of the story here for our growth, which is consumers wanting to take charge of their own health and activate the digital platforms to control weight and obesity. I think this is here to stay, and it's a big part of our business now and probably something we need to continue to invest in. We're doing just that, so you should expect continuous improvement in that experience for consumers in the U.S., and then expansion nationally with the current offerings. I would also say, you know, this notion as we move into other kinds of medicines that could be more preventative could be quite a useful platform to reach more people. We all know that the financing of the current healthcare system is a struggle everywhere. And with, you know, all the noise around PAs and other barriers to care people need, people want to take it in their own hands. And I think, of course, we need to do that within the confines of the regulations and law, but there's a lot of room for improvement for consumers and It's a great outlet potentially for us. So let me ask Ilya or Patrick to add to that if they have anything to add on Lilly Direct and our offerings.
Executive Name (Title): Yeah, sure. Just maybe a few key components of what we've seen on Lilly Direct. Even with Zetbound, you've seen that currently around 55% of new patient starts are coming through self-pay for most of which is coming through Lilly Direct or telehealth players, which is a component of reducing some of the frictions in place. And even early in our launch of Foundeo with limited promotion, we're seeing that that reduced friction level and understanding direct to the consumer is an important lever. About 45% of our volume for Foundeo early on is coming through Lilly Direct. And so we continue to look at ways to improve on the experience for both providers and for consumers in the way they get their and enter their journey for disease, and obviously it plays a significant role for obesity currently. Similarly outside of U.S., I referred earlier to us being at a very high market share in most of the markets already, and patient activation is going to drive most of the coming growth. And we have seen that the markets are responding to patient activation efforts, although it's a slower ramp, but that's going to be key, taking into account the low penetration of incretins outside of U.S.
Management: Thank you. Let's move to the next question, please.
Analyst Name (Firm): The next question will be from Umair Rafat from Evercore. Umair, your line is live.
Analyst (Evercore): Hi, guys. Thanks for taking my question. I thought I'll spend a quick second on Zeb Bound's commercial dynamics in U.S. And really what I'm trying to understand is, for example, 1Q, 7 million TRX and 4.1 billion sales for Zeb Bound in U.S., meaning it's about $580 per prescription. And even if you adjust for some of the one-timer adjustments, it's still about $550 per RX, whereas we understand the cash-pay prices to be about $450 or so, and we know prices, too. I guess what explains that delta? Or maybe IMS is just not capturing some of your online channels. Thank you.
Executive Name (Title): Great. Thanks, Umar. Lucas will talk a bit about pricing dynamics in the U.S.
Executive (Title): Yeah, Umar, thank you for your question. And quick math, your math is pretty spot-on, by the way. So... Just to highlight, yes, and even normalizing by these period adjustments. First of all, again, going back to the initial question on pricing, if you carve out what we agreed on MFN side as well back in November, and then the NRDL access, prices have been relatively stable quarter on quarter. I think it's going back to what we discussed last time about maintaining that price discipline. We continue to see that happening while we continue to grow significantly on the volume side as well. And yes, again, going back to your analysis on the pricing, yes, you have the Lily Direct prices that, as you know, we have adjusted down starting in December. And those prices have been very stable on that front as well. And then the rest, basically, by difference, you get into the commercial business, mainly that that's the different portion that it gets to that net 550 that you highlighted. Maybe just one add. I think that isn't widely appreciated. There is a reasonable amount of medical exception and OSA usage that moves across channels at close to an undiscounted price. So I think that's probably the piece of your math, Umar, that you might want to take a look at.
Management: Great. Good add. Thanks, Dave. Next question, please. We'll try to get through a couple more if we can.
Analyst Name (Firm): The next question will be from Courtney Breen from Bernstein. Courtney, your line is live.
Analyst (Bernstein): Hi, guys. Thanks so much for taking the question today. I know there's been a huge amount of focus on kind of the first few weeks of Foundeo and specifically kind of the launch strategy and activation of the different channels. Perhaps, Ken, it would be helpful if you could talk through how does this compare to kind of a traditional primary care launch? What things are you accelerating? what things are you holding back and for what reasons, particularly in the context of the fact that you've got extreme amounts of inventory pre-prepared for the launch of this product.
Executive Name (Title): Okay. Thanks, Courtney. Ilya, do you want to make a few more comments about the Foundeo launch vis-a-vis primary care?
Executive (Title): Sure. Yeah, maybe just probably the three elements I discussed earlier are probably the same for all of our primary care launches, where you need to grow the prescriber base and understanding of the profile of the medicine and that's what we're doing here with foundeo building out access and quite frankly this is actually getting access very early in launch both on the commercial side having two of the three being activated in the next couple of weeks and getting part d which is usually usually lags in july is a faster ramp on access and so we're excited about that aspect The piece that is probably on the primary care side an important element that many have noted is around DTC. And we activated from day one in the first week a number of both digital, social media, and out-of-home advertising on the brand itself. But it does take time to build out consumer awareness. understanding and awareness of the brand. The current sentiment, if you follow the total number of impressions and what consumers are saying about the profile foundale, is resonating. So both the efficacy as well as the overall profile on not having food or water restrictions.
And so that element is positive. Now, obviously, having full DTC launch, we're still activating that probably earlier than normal because there is familiarity around GLP-1. But we do want to take a moment and be disciplined in the approach of making sure that we build that awareness and understanding before we go full throttle.