Eli Lilly and Company (NYSE: LLY) delivered a blockbuster first quarter for fiscal 2025, fueled by the surging success of its diabetes and obesity treatments—Mounjaro and Zepbound—and further bolstered by a robust and advancing drug pipeline. The pharma giant reported a staggering 45% year-over-year (YoY) increase in revenue, reaching $12.73 billion for Q1 2025, reflecting not only strong demand for its key products but also firm strides in research and development across multiple therapeutic areas.

Record Revenues Driven by Obesity and Diabetes Portfolios

At the heart of Lilly’s strong quarter lies Mounjaro and Zepbound—both incretin-based therapies that have seen exponential growth. Mounjaro (tirzepatide), approved for type 2 diabetes, posted global sales of $3.84 billion, more than doubling from $1.81 billion in Q1 2024. Meanwhile, Zepbound, an obesity treatment, delivered a meteoric rise in U.S. revenue to $2.31 billion—up from $517 million—a year-on-year increase that reflects accelerating uptake among prescribers and patients alike.

The U.S. market continues to be Lilly’s cornerstone, contributing $8.49 billion in sales (up 49% YoY), while international markets added $4.24 billion, up 38% from the prior year. This international growth was propelled not just by Mounjaro, but also by Jardiance, which received a one-time benefit of $370 million due to an amended collaboration with Boehringer Ingelheim.

EPS Climbs Despite IPR&D Charges

Lilly reported earnings per share (EPS) of $3.06 on a GAAP basis, a 23% increase over Q1 2024, despite significant charges related to in-process research and development (IPR&D) acquisitions. On a non-GAAP basis, which excludes IPR&D and other one-off items, EPS came in at $3.34, up 29% from the previous year. Net income on a non-GAAP basis also rose 29% to $3.00 billion.

The company absorbed a $1.57 billion IPR&D charge related to the acquisition of Scorpion Therapeutics’ PI3Kα inhibitor program (STX-478), demonstrating Lilly’s continued commitment to expanding its oncology pipeline.

Gross Margin Expansion and Strategic Investment

Gross margin as a percentage of revenue improved to 82.5% (reported) and 83.5% (non-GAAP), driven by an improved product mix and manufacturing efficiencies, despite pricing pressures and foreign exchange headwinds. Operating income rose 46% on a non-GAAP basis to $3.85 billion.

Lilly’s management emphasized ongoing capital commitments, including a plan to double U.S. manufacturing investment to exceed $50 billion since 2020—aimed at meeting increasing global demand for new therapies.

Pipeline Momentum: Orforglipron Steals the Show

One of the most promising pipeline developments in Q1 was the success of orforglipron, Lilly’s once-daily oral GLP-1 receptor agonist. In its Phase 3 ACHIEVE-1 study, the drug showed significant efficacy in reducing HbA1c and body weight—matching the performance of injectable GLP-1 therapies. At the highest dose, patients experienced an average 7.9% body weight reduction (16 lbs) and a 1.6% HbA1c decrease from baseline.

The safety profile mirrored that of existing GLP-1 injectables, and adverse event-driven discontinuations remained low. With additional late-stage trials under way in obesity, type 2 diabetes, sleep apnea, and cardiovascular risk, orforglipron could emerge as a key blockbuster oral therapy.

Regulatory submissions for orforglipron in obesity are expected in Q4 2025, with type 2 diabetes submissions to follow in the first half of 2026.

Other Notable Pipeline Highlights

Lilly’s R&D engine is running at full throttle with advancements across several key programs:

• Jaypirca (pirtobrutinib): Received EU approval for relapsed/refractory CLL in patients previously treated with BTK inhibitors.
• EBGLYSS (lebrikizumab): Achieved complete skin clearance at 3 years in half of patients with moderate-to-severe atopic dermatitis.
• Baricitinib: Delivered robust hair regrowth in adolescents with severe alopecia areata in its BRAVE-AA-PEDS trial.
• Omvoh (mirikizumab): Demonstrated sustained clinical remission in Crohn’s disease patients at the two-year mark.
• Lepodisiran: Showed nearly 94% reduction in lipoprotein(a)—a genetic risk factor for cardiovascular disease.

Financial Guidance Reaffirmed, EPS Outlook Adjusted

Despite IPR&D-related charges, Lilly reaffirmed its full-year 2025 revenue guidance between $58.0 billion and $61.0 billion. Performance margin expectations remain between 40.5%–42.5% (GAAP) and 41.5%–43.5% (non-GAAP).

However, full-year reported EPS was revised downward to $20.17–$21.67 (from $22.05–$23.55) to account for IPR&D and equity investment losses. Non-GAAP EPS guidance now stands at $20.78–$22.28.

The effective tax rate also ticked higher—from 16% to 17%—due to the non-deductibility of IPR&D expenses.

Strategic Outlook: Setting Up for Long-Term Dominance

Eli Lilly’s Q1 2025 performance underscores not just current commercial strength, but also its long-term potential as a dominant player in obesity, diabetes, Alzheimer’s, immunology, and oncology. The success of Mounjaro and Zepbound marks a paradigm shift in chronic disease management, while orforglipron offers a pill-based solution that could expand the market even further.

Moreover, the company’s massive investment in manufacturing, share repurchases, and dividend payouts signals a commitment to shareholder value. With nearly 53.3% market share in U.S. incretin analogs, Lilly now leads a critical market segment ahead of competitors like Novo Nordisk.

In the near term, investors will closely watch for further Phase 3 data from orforglipron, regulatory milestones for donanemab in Alzheimer’s disease, and upcoming cardiovascular outcomes data from tirzepatide.

Conclusion

Eli Lilly’s Q1 2025 results are a testament to strategic execution, clinical innovation, and commercial momentum. While the stock may see volatility linked to R&D spending and pricing dynamics, the company’s growth trajectory remains impressive and increasingly diversified. As its pipeline matures and new therapies reach the market, Lilly is well-positioned to define the next era of global biopharma leadership.

Disclaimer:
This article is intended for informational purposes only and does not constitute investment advice. The views expressed are based on publicly available data and are not recommendations to buy or sell any securities. Please consult a financial advisor before making investment decisions. Data and financials are accurate as per the company’s earnings release and filings at the time of writing.