Lilly raised sales guidance for third time this year as Zepbound sales soar. Its stock closed at a record high.

By Jaimy Lee

The drugmaker continues to dominate the market for prescription weight-loss drugs in the U.S.

Lilly CEO Dave Ricks speaks at the Semafor World Economy summit in Washington, D.C., in April. (Photo by Alex Wong/Getty Images)

Eli Lilly posted another record quarter as sales of its weight-loss injection Zepbound soared.

The company also raised its outlook for the third time this year, saying it now expects revenue between $91 billion and $92 billion in 2026. Its shares (LLY) ended Thursday 6.6% higher, to close at its highest-ever price of $1,373.70.

Zepbound's revenue was $5.4 billion in the third quarter, up 49% from $3.6 billion in the same three months last year and more than the FactSet estimates of $5.0 billion.

Some of that growth can be attributed to the 1.1 million older adults who have been prescribed GLP-1 drugs for weight loss since July 1, when Medicare began covering weight-loss drugs for the first time since the 1990s. Lilly said in its presentation that about 500,000 patients are getting Foundayo or Zepbound through the so-called Bridge program. That's expected to be a major boon to Lilly's business, potentially bringing in $4 billion by the end of the year, according to Jefferies analyst Akash Tewari in a note to investors earlier this week.

"Probably the single largest driver of increased access is the Bridge in Medicare," Ilya Yuffa, president of Lilly Global Markets, said last month at the Morgan Stanley Global Healthcare Conference, according to an AlphaSense transcript. "We are seeing obviously good initial uptake."

Seven out of 10 prescriptions in the Bridge program are for Lilly's drugs, he noted during Thursday's call. Lilly has likely captured 64% of the market for weight-loss drugs in the U.S., according to Jefferies, but its weight-loss pill Foundayo has struggled to gain traction against Novo Nordisk's (NVO) (DK:NOVO.B) Wegovy pill, which came to market several months earlier than Foundayo.

Foundayo had sales of $184 million in the third quarter, coming in lower than the FactSet estimate of $299 million. It had $98 million in sales last quarter, the first quarter in which it was available.

"Foundayo continues to lag," BMO Capital Markets analyst Evan David Seigerman told investors, noting that "the strength of Lilly's broader commercial business makes this less of a concern."

Overall sales were $24.4 billion, up 39% from $17.6 billion in the same three months a year ago. The FactSet estimate was $22.6 billion.

Zepbound and Mounjaro, the same drug as Zepbound but approved to treat Type 2 diabetes, make up 66% of Lilly's total revenue.

Lilly has already raised its outlook twice this year, starting the year with an outlook that anticipates revenue between $80 billion and $83 billion in 2026. By August, it expected between $85 billion and $87 billion in sales.

Lilly demonstrated "strong execution across the GLP-1 franchise with volume growth more than offsetting pricing pressure," RBC Capital Markets analyst Trung Huynh told investors, noting that the company's decision to again raise guidance "demonstrates confidence in the durability of the obesity/diabetes franchise."

Net income was $6.5 billion, against a FactSet estimate of $5.1 billion. That came in far lower than in recent quarters due to a $4.2 billion in-process research and development charge related to the acquisitions of psychedelic drug developer AtaiBeckley and vaccine biotech Curevo. Adjusted earnings per share were $7.48, surpassing the FactSet estimate of $5.68.

Lilly's stock has soared 19.3% so far this year, driven by two factors: its dominance in the lucrative market for prescription weight-loss drugs and tech investors turning to healthcare stocks for consistent returns. Its shares hit yet another all-time high, closing at $1,306.69 on Oct. 22.

The State Street Health Care Select Sector SPDR Exchange Traded Fund XLV closed 2.4% higher on Thursday, fueled by Lilly and Merck's stock gains. Merck's shares (MRK) closed 3.8% higher on a strong earnings beat.

-Jaimy Lee

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10-29-26 1622ET