ELI LILLY & Co. has reported a significant increase in revenue for the three and six months ended June 30, 2025. The revenue increased by 38% and 41% respectively, driven by increased volume, partially offset by lower realized prices. The increased volume and lower realized prices were primarily driven by Zepbound and Mounjaro.
The net income for the same periods also saw a substantial increase, with a 91% rise in the three months ended June 30, 2025, and a 62% increase for the six months ended June 30, 2025. This increase was primarily due to higher gross margin, partially offset by increased marketing, selling, and administrative expenses and research and development expenses.
ELI LILLY & Co. provided updates on its clinical development pipeline, including the submission of applications for various compounds such as tirzepatide for pediatric and adolescent type 2 diabetes and insulin efsitora alfa for type 2 diabetes to regulatory authorities in the U.S. and Europe. Additionally, several Phase 3 trials were initiated for different compounds targeting various conditions such as cardiovascular outcomes in type 2 diabetes, type 1 diabetes, obesity, hypertension, and chronic low back pain.
The company also highlighted the impact of global concerns over access to and affordability of pharmaceutical products on its business. Regulatory and legislative debates, cost containment efforts by governmental authorities, and scrutiny of pricing and access disparities continue to affect the pharmaceutical industry. ELI LILLY & Co. mentioned specific regulatory developments, such as an executive order in the U.S. intended to tie prescription drug prices with prices in comparably developed nations and the enactment of the OBBBA, which implements spending cuts to certain federal healthcare programs.
The report also addressed the challenges related to pharmaceutical pricing, reimbursement, and access, including the potential impact of the Inflation Reduction Act of 2022, which requires setting prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D. The company expects these measures to significantly influence its business strategies and consolidated results of operations.
ELI LILLY & Co. acknowledged the impact of tax laws and regulations on its effective tax rate, results of operations, and cash flows. The enactment of the OBBBA was highlighted as a significant development that is expected to increase the company's effective income tax rate to approximately 19% for the year ending December 31, 2025, while decreasing income tax payments during the second half of 2025.
The company also emphasized the importance of its acquisitions, collaborations, investments, and licensing arrangements to enhance its pipeline and strengthen its business. However, it noted that continued regulatory focus on business combinations in the pharmaceutical industry could potentially delay, jeopardize, or increase the costs of its business development activities and negatively impact its consolidated financial position or results of operations.
ELI LILLY & Co. highlighted foreign currency risk exposure from fluctuating currency exchange rates, primarily the U.S. dollar against the euro, Japanese yen, and Chinese yuan, as a significant risk factor for its global operations. Following these announcements, the company's shares moved -14.19%, and are now trading at a price of $640.435. Check out the company's full 10-Q submission here.
