Key Takeaways
- Eli Lilly raised its 2026 revenue guidance to $91 billion to $92 billion, its second raise in three months, and Elon Musk backed CEO Dave Ricks on X a day later.
- Mounjaro and Zepbound made 65% of revenue in the first half of 2026, and everything else Lilly sells grew just $95 million in 2025.
- Retatrutide beat Novo Nordisk’s Ozempic head to head and is the only pipeline drug big enough to take over, but the FDA classified it as a drug rather than a biologic, a court sent part of that decision back to the agency, and Lilly’s appeal is pending.
- Before the earnings rally, Lilly traded at 34x forward earnings, below its five-year average of 40x.
Eli Lilly (LLY) raised its 2026 revenue guidance on October 29 for the second time in three months, to $91 billion to $92 billion. A day later, Elon Musk weighed in on X, and the drug he’s most likely talking about just beat Novo Nordisk’s (NVO) Ozempic head to head.
It started with a Musk post on October 29 saying “breakthroughs in everything are accelerating exponentially.” Venture capitalist Vinod Khosla agreed, but said it’s “unlikely it will come from the big bio companies.”
Lilly CEO Dave Ricks answered on Friday: “I’ll take that bet.”
Musk’s response? “Eli Lilly has some banger drugs coming out!”
Ricks picked the right fight. Lilly is worth about $1.1 trillion, and two drugs carry almost all of its growth today. The bet is really about whether the next ones show up in time.
Two Drugs Are Doing the Heavy Lifting
Revenue rose 39% to $24.4 billion in the third quarter. Mounjaro jumped 65% to $10.7 billion and Zepbound rose 49% to $5.4 billion. Both are tirzepatide, which made up 65% of Lilly’s revenue in the first half of 2026.
In 2025, tirzepatide added $20.0 billion of Lilly’s $20.1 billion revenue increase. Everything else Lilly sells grew $95 million, to $28.7 billion.
Analysts expect revenue to keep climbing, to $117 billion by 2028.
The 2026 estimate of $91.7 billion already sits inside the new range. Next year is harder. CFO Lucas Montarce said on the third-quarter call that about $2 billion of this year’s revenue came from milestones and rebate changes that won’t repeat. He also said net price will stay a headwind in 2027, more than offset by volume. Realized prices already fell 15% in the third quarter while volume rose 53%.
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Retatrutide Is the Banger That Matters
Musk didn’t name a drug, but Lilly’s pipeline has three candidates.
Retatrutide, its next injectable, produced more than double the weight loss of Ozempic’s highest approved dose in a head-to-head trial in type 2 diabetes. Lilly plans to file it in the first quarter of 2027.
Foundayo, its obesity pill, sold $184 million in the third quarter, up from $98 million in the second, but short of what analysts expected. Most of its big launches abroad don’t come until 2027.
Lilly’s newest cancer, immunology and neuroscience drugs doubled their sales in the third quarter, but from a small base: five of them sold $737 million in the second quarter, 3.2% of revenue.
Only retatrutide is big enough to take over from tirzepatide.
Retatrutide’s Biggest Risk Is a Court Case
How long retatrutide stays protected hasn’t been settled. In 2024, the FDA classified it as a drug rather than a biologic, because by its count the molecule falls under the 40-amino-acid cutoff. Lilly sued. In September 2025, the district court backed the FDA’s amino acid count but vacated the classification and sent back the question of whether retatrutide is “analogous” to a protein, which could still make it a biologic. Lilly appealed. The Seventh Circuit heard the case on September 24 and hasn’t ruled.
The stakes are large. A biologic gets 12 years of market exclusivity, against five for a drug, and 13 years before Medicare can set its price, against nine. Lilly still plans to file as a biologic.
Lilly is also buying some of what comes next. It paid $13.3 billion for deals in the first half. In the third quarter, $4.57 a share of acquired R&D charges cut its 2026 EPS guidance to $35 to $36, even as revenue guidance rose.
Lilly Stock Is Cheaper Than Its Own History
Before the earnings rally, Lilly traded at 34x forward earnings, below its five-year average of 40x and far from its 67x peak in October 2023.
It’s also far more profitable than it was at that peak. Operating margin climbed from 29% in 2021 to 46% in 2025 as Mounjaro and Zepbound scaled.
Ricks Should Win This Bet
Musk’s post proves nothing on its own. The data still favors Ricks. A drug that doubles Ozempic’s weight loss, a filing three months out and a multiple below its own average add up to a stock that isn’t paying much for retatrutide yet.
The classification is the condition. Lilly has two ways to get biologic protection: a win at the Seventh Circuit, or the FDA deciding on remand that retatrutide is analogous to a protein. If both fail, Lilly gets five years of exclusivity instead of 12 on the drug meant to replace tirzepatide. That ruling, more than Lilly’s December 7 investor update, is the next thing I’d watch.
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