Mounjaro revenue grew 68% to $5,198.9 million and Zepbound revenue soared 172% to $3,381.4 million for the three months ended June 30, 2025. These two products are the primary drivers of the company's overall revenue increase, demonstrating successful market penetration and strong demand in the cardiometabolic health segment.

The company incurred $1.73 billion in acquired In-Process Research and Development (IPR&D) charges for the six months ended June 30, 2025, primarily related to the acquisition of Scorpion Therapeutics' PI3Ka inhibitor program. Subsequent to quarter-end, Lilly also acquired Verve Therapeutics (up to $1.3 billion) for genetic medicines and SiteOne Therapeutics (up to $1.0 billion) for pain treatment, signaling a robust external innovation strategy.

Lilly acquired NexPharm Parent HoldCo, LLC and Isopro Holdings, LLC for $924.7 million in May 2024 to expand its parenteral product manufacturing network. The company is making substantial investments in global facilities, with expenditures for long-lived assets increasing 42% to $3,501.7 million for the six months ended June 30, 2025, to address high demand for its incretin medicines.

Management's focus on Mounjaro and Zepbound has resulted in significant volume-driven revenue growth, with these products being the primary drivers of the 38% quarterly and 41% year-to-date revenue increases. This indicates successful execution of commercial strategies and strong market acceptance.

Research and development expenses increased 23% for the quarter and 16% for the six months ended June 30, 2025, reflecting continued investment in the early and late-stage pipeline. Concurrently, capital expenditures for long-lived assets rose 42% to $3,501.7 million for the six-month period, demonstrating management's commitment to expanding production capacity for existing and future products.

Management acknowledged that demand for incretin medicines exceeded production in 2024 and that periodic unavailability may still occur for certain presentations. However, they stated that production increases and delivery presentation initiatives are ongoing, with additional capacity expected to be operational over the next several years, indicating a focused response to operational challenges.

New U.S. presidential administration executive orders and the recently enacted One Big Beautiful Bill Act (OBBBA) are expected to increase pricing pressures and implement spending cuts to federal healthcare programs. The Inflation Reduction Act of 2022 has already selected Jardiance for government-set price negotiations effective in 2026, indicating a material impact on future revenue and business strategies.

Since August 2023, various plaintiffs have filed lawsuits alleging injuries from incretin medicines, including Mounjaro, Trulicity, and Zepbound. These cases are being coordinated in a federal MDL, representing a new and potentially significant litigation risk for the company's high-growth products.

The company continues to face regulatory challenges, including ongoing 340B litigation and a civil investigative subpoena from the Vermont Attorney General. Additionally, the proliferation of counterfeit, misbranded, and adulterated incretin medicines is noted as a risk impacting patient safety and undermining regulatory processes, requiring Lilly to consider legal actions.

Mounjaro and Zepbound demonstrated exceptional growth, with Zepbound's revenue increasing 172% and Mounjaro's 68% for the three months ended June 30, 2025. This indicates strong competitive advantages and significant market share capture in the rapidly expanding cardiometabolic health segment, despite intense competition.

Trulicity revenue decreased for both the three and six months ended June 30, 2025, indicating a potential shift in market dynamics or increased competitive pressure. Management also noted that overall revenue growth was partially offset by lower realized prices, suggesting a challenging pricing environment across its portfolio.

Verzenio revenue increased 12% to $1,489.3 million for the three months ended June 30, 2025, and total oncology revenue grew 11.8%. Taltz revenue also saw a modest increase of 2.8%, contributing to a 16% rise in total immunology revenue. This demonstrates the company's ability to maintain growth across diverse therapeutic areas beyond its blockbuster incretins.

The gross margin as a percentage of revenue increased by 3.5 percentage points to 84.3% for the three months ended June 30, 2025, compared to 80.8% in the prior year. This improvement is primarily attributed to improved cost of production and a favorable product mix, indicating enhanced operational efficiency in manufacturing.

Marketing, selling, and administrative expenses increased 30% for the three months ended June 30, 2025, to $2,753.0 million, driven by promotional efforts for ongoing and future launches. Similarly, R&D expenses rose 23% to $3,336.1 million, reflecting continued investment in the pipeline. These increases, while impacting profitability, are strategic for long-term growth.

Inventories significantly increased to $11,013.8 million at June 30, 2025, from $7,589.2 million at December 31, 2024. This increase is primarily due to pre-launch inventory for commercialization and marketplace trends, particularly related to Orforglipron, indicating proactive management of supply chains to support anticipated demand.

Research and development expenses increased 23% year-over-year for the three months ended June 30, 2025, reaching $3,336.1 million, and 16% for the six-month period to $6,069.8 million. This sustained investment reflects the company's commitment to advancing both early-stage discovery and late-stage clinical programs.

The company recognized $1.73 billion in acquired IPR&D charges for the six months ended June 30, 2025, primarily from the acquisition of Scorpion Therapeutics' PI3Ka inhibitor program STX-478. Post-quarter, Lilly also acquired Verve Therapeutics for genetic medicines and SiteOne Therapeutics for pain, demonstrating a strategy of leveraging external innovation to enhance its therapeutic portfolio.

Several compounds showed significant progress: Orforglipron and Insulin Efsitora Alfa met primary endpoints in Phase 3 trials, Mirikizumab received approval in Japan for Crohn's disease, Donanemab received a positive opinion from the EMA for Alzheimer's, and Pirtobrutinib was approved in the EU for chronic lymphocytic leukemia. This indicates a productive R&D engine delivering on strategic objectives.

The company increased capital expenditures for long-lived assets by 42% to $3,501.7 million for the six months ended June 30, 2025, and R&D expenses rose 16% to $6,069.8 million. This significant allocation of capital towards internal development and manufacturing expansion underscores a growth-oriented strategy to support current product demand and future pipeline assets.

Lilly deployed $1.86 billion in 2025 for acquired IPR&D, primarily for Scorpion's PI3Ka inhibitor program, and subsequently committed up to $2.3 billion for the acquisitions of Verve and SiteOne. These investments demonstrate a clear capital allocation strategy focused on expanding the product pipeline and entering new therapeutic areas through M&A.

The company paid $2.69 billion in dividends ($3.00 per share) and repurchased $1.89 billion of shares during the six months ended June 30, 2025, with $13.11 billion remaining under its share repurchase program. Concurrently, total debt increased by $6.26 billion to $39.90 billion, partly due to the issuance of $6.50 billion in fixed-rate notes to fund acquisitions and general business purposes, indicating a reliance on debt to finance growth while maintaining shareholder distributions.

The 10-Q filing primarily focuses on financial performance and operational updates, with no specific sections or detailed quantitative information dedicated to environmental, social, or governance (ESG) initiatives, commitments, or progress. General risk factors mention 'actual or perceived deviation from environmental-, social-, or governance-related requirements or expectations' but lack specific programs.

The company is involved in legal proceedings related to 'Superfund' environmental matters as a potentially responsible party for cleanup sites and 'Brazil Litigation' concerning alleged harm to employees from exposure to soil and groundwater contaminants at a former manufacturing facility. These indicate historical or ongoing social and environmental liabilities rather than proactive ESG initiatives.

The company is evaluating the impact of ASU 2024-03, 'Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,' effective for annual periods beginning after December 15, 2026. While not directly an ESG initiative, this standard could lead to more granular reporting of expense categories, potentially including those related to ESG efforts, in future filings.

The U.S. presidential administration issued an executive order in May 2025 to encourage 'most-favored-nation pricing,' and the One Big Beautiful Bill Act (OBBBA) enacted in July 2025 includes spending cuts to federal healthcare programs. These actions, alongside the Inflation Reduction Act of 2022 (which has already selected Jardiance for price negotiation), indicate a significantly challenging and uncertain pricing environment for pharmaceuticals.

The market for incretin medicines, exemplified by Mounjaro and Zepbound, continues to exhibit strong demand, leading to substantial revenue growth for Lilly. However, this high demand has also led to past production exceeding capacity and ongoing initiatives to expand manufacturing, as well as the emergence of counterfeit products, highlighting both opportunities and operational complexities in this market segment.

Management noted that global macroeconomic conditions, including uneven economic growth, inflation, and foreign currency fluctuations, continue to impact operations. Furthermore, international tension, conflicts, trade disputes, and tariffs are identified as risks that could lead to supply disruptions, increased costs, or other negative impacts on the company's global business.