The performance of the two leading weight-loss drugs diverged! Strong sales powered Eli Lilly (LLY.US) to Q2 results exceeding expectations.

According to Zhitong Finance APP, Eli Lilly (LLY.US) reported better-than-expected second quarter results before the market opened on Wednesday, mainly driven by strong sales of its injectable GLP-1 drug and the newly launched oral weight-loss drug Foundayo. As of press time, the company was up 5%.

Competitor Novo Nordisk (NVO.US) also posted better-than-expected results and raised its full-year guidance on Tuesday, but its share price still closed down, as sales of its much-watched oral weight-loss drug fell short of Wall Street expectations.

Headquartered in Indiana, Eli Lilly achieved revenue of $23 billion in the second quarter, up approximately 48% year-on-year and $2.3 billion above consensus estimates. On the profit side, the company’s adjusted earnings per share grew about 33% year-on-year to $8.38; gross margin rose by 130 basis points year-on-year to 86.3%, mainly benefiting from lower cost of sales and product portfolio optimization.

By product, the injectable weight-loss drug Zepbound generated $4.9 billion in revenue, and the diabetes drug Mounjaro contributed $9.9 billion, both exceeding analysts’ estimates of $4.6 billion and $8.8 billion, respectively.

The newly launched oral weight-loss drug Foundayo recorded $98 million in sales, also beating expectations of $92 million.

Behind the strong performance, Eli Lilly intensely pushed forward with mergers and acquisitions integration in the second quarter, completing the acquisitions of Orna Therapeutics, Ajax Therapeutics, Centessa Pharmaceuticals, and Kelonia Therapeutics.

After the earnings report, the company also agreed to acquire clinical-stage company AtaiBeckley for a prepayment of about $2.8 billion. AtaiBeckley focuses on developing psychedelic therapies for refractory depression and other mental disorders. Eli Lilly also announced the completion of three additional acquisitions to build its infectious disease product portfolio.

In terms of pipeline progress, Eli Lilly stated that the positive phase III data of its next-generation weight-loss candidate retatrutide is now sufficient to support global registration filings, covering indications such as obesity, obstructive sleep apnea, and knee osteoarthritis pain. The company plans to submit a Biologics License Application (BLA) to the FDA in the first quarter of 2027.

Looking ahead, Eli Lilly raised its full-year guidance, expecting revenue to range between $85 billion and $87 billion. The guidance midpoint of $85.4 billion is slightly below consensus estimates of $85.4 billion (essentially flat). Adjusted earnings per share are expected to be $35.50 to $36.50, exceeding analysts’ forecast of $34.54, but it should be noted that business development activities in the second quarter had a negative impact of about $3.03 per share.

Haggerston BioHealth head Edmund Ingham commented that Eli Lilly’s full-year revenue in 2020 was only $24 billion, while by the first half of 2026 the company’s revenue had surpassed $42 billion.

He noted, “Eli Lilly’s growth driven by weight-loss/Type 2 diabetes drugs Zepbound and Mounjaro is remarkable.” He added that in the second quarter, the company announced three positive pivotal study results for its next-generation weight-loss drug retatrutide, and the approval of this third ‘super blockbuster’ drug now seems almost certain.