Eli Lilly’s Q2 Performance Amid Market Volatility

Eli Lilly and Company reported robust second-quarter earnings for 2025, showcasing significant revenue growth driven by its flagship drugs Mounjaro and Zepbound. The company posted $15.56 billion in revenue, surpassing Wall Street expectations of $14.4 billion, according to data from Endpoints News. This surge was largely fueled by strong demand for its GLP-1 receptor agonists, with non-GAAP net income reaching $5.68 billion and earnings per share at $6.31. Despite these impressive figures, the stock experienced a sharp decline, dropping as much as 12% in pre-market trading, as investors reacted to the latest Phase 3 trial results for its experimental oral obesity pill, orforglipron.

In an exclusive interview on CNBC’s Squawk Box, Eli Lilly CEO David Ricks addressed the market’s response, emphasizing that the company remains optimistic. Ricks highlighted that orforglipron achieved an average weight loss of 12.4% in the ATTAIN-1 trial, involving over 3,000 obese or overweight adults, meeting all primary and key secondary endpoints. He noted that this aligns with the drug’s intended profile as a convenient, scalable oral alternative to injectable treatments, positioning it for the mass market.

Decoding the Trial Data and Investor Sentiment

The ATTAIN-1 study, detailed in Lilly’s investor relations release, showed orforglipron leading to 11.2% to 12.4% weight loss at 72 weeks, with participants shedding an average of 27 pounds. While this is competitive with other single-acting GLP-1 drugs, it fell short of some analyst expectations, which anticipated results closer to rivals like Novo Nordisk’s Wegovy, which has demonstrated up to 15% weight loss. Posts on X, formerly Twitter, reflected mixed sentiment, with users like @Finflexity noting that despite the lower efficacy, orforglipron’s ease of manufacturing could still make it a game-changer.

Ricks pushed back against the disappointment, stating in the CNBC interview that the results are “right on thesis” for Lilly’s strategy. He pointed out that for most overweight individuals seeking cardiometabolic improvements, a 12% reduction is substantial. The company plans to submit the data to regulators by year-end, aiming for approvals globally by mid-2026. This move underscores Lilly’s confidence in orforglipron’s safety profile, which showed discontinuation rates due to side effects at around 10%, consistent with injectable GLP-1s.

Safety Profile and Discontinuation Concerns

A key focus in the trial was tolerability. The study reported that about 25% of participants at the highest dose discontinued for any reason, but Ricks clarified that the dropout rate attributable to the drug was lower than placebo by 6-7 points. “The placebo dropout rate is quite a bit higher,” he explained on CNBC, attributing overall discontinuations to study design factors like its global scope and duration. Serious adverse events were in the 8-12% range, aligning with industry norms for GLP-1 therapies.

Analysts, including those from Benzinga, have raised questions about whether lower weight loss might contribute to dropouts, but Ricks countered that landmark analyses show a high proportion achieving over 10% loss—often more than 20 pounds. This, he argued, meets patient goals. Full results are expected at a medical conference next month, potentially providing deeper insights into cultural and regional variations in the global cohort.

Broader Market Dynamics and Pipeline Outlook

Lilly’s overall performance reflects a resilient position in the burgeoning obesity and diabetes market, valued at potentially hundreds of billions. Year-over-year sales rose 38%, with tirzepatide (Mounjaro) on track to become the industry’s top-selling drug in its third year. Ricks noted in the interview that only 2-3% of the global obese population—over a billion people—is currently treated, highlighting vast untapped potential for oral options like orforglipron.

Despite sector-wide pressures, including compressed PE multiples, Lilly raised its full-year 2025 guidance, signaling strong back-half growth. The company has mitigated safety risks that plagued earlier questions about orforglipron, with seven Phase 3 studies underway. As reported by CNBC, this positions Lilly to challenge Novo Nordisk, even as shares of the latter rose 6% on the news.

Strategic Implications for Pharma Giants

Ricks addressed broader stock volatility, acknowledging macro factors affecting healthcare but focusing on intrinsic value creation. “The company is undoubtedly more valuable today than last year,” he asserted on CNBC, citing pipeline advancements and market expansion. Investors, however, remain cautious, with X posts from @LiveSquawk highlighting the 11.2% average weight loss as a point of contention.

Looking ahead, orforglipron’s approval could disrupt the market by offering a needle-free, mass-producible alternative, potentially capturing share from injectables. Combined with Lilly’s earnings beat, this reinforces its leadership, though competition from Pfizer and Amgen looms. As Ricks concluded, Lilly is “rolling” toward innovations that benefit patients and shareholders alike, with orforglipron central to that vision.