When Eli Lilly releases its first-quarter results on Thursday, investors will be greeted by what looks like a stellar set of numbers on paper. Analysts expect earnings per share of $7.26 — more than double the year-ago figure — on revenue of roughly $17.8 billion, representing nearly 40% growth. Yet the stock, trading around €745.90, has shed roughly 18% since January and sits well below its 50-day moving average. The disconnect between financial performance and market sentiment points to one thing: Foundayo.
The newly approved oral weight-loss pill was supposed to be Lilly’s next growth engine, but early prescription data has poured cold water on that narrative. In its first full week on the market, Foundayo generated only about 3,700 prescriptions. That pales next to Novo Nordisk’s oral Wegovy, which racked up more than 18,000 scripts in its comparable launch week back in January. As a result, consensus estimates for Foundayo’s 2026 revenue have collapsed from an initial $4 billion to $5 billion range down to between $1.3 billion and $1.6 billion. Jefferies models $1.6 billion for this year but sees long-term potential of up to $30 billion annually.
The slow start has forced a recalibration of expectations that will dominate Thursday’s earnings call, scheduled for 10:00 a.m. Eastern time. Management will face pointed questions about the drug’s trajectory and whether the company can accelerate adoption. Adding to the pressure, Lilly is absorbing a roughly $600 million R&D charge in the first quarter, which will weigh on margins.
A Robust Core Business, but Headwinds Mount
Foundayo’s struggles aside, Lilly’s existing GLP-1 franchise remains formidable. Mounjaro and Zepbound together command nearly 60% of new prescriptions in the injectable weight-loss market. For the full year, management has guided for revenue between $80 billion and $83 billion, with non-GAAP earnings per share of $33.50 to $35.00. That compares with fourth-quarter 2025 revenue of $19.29 billion, which topped analyst estimates.
But the pricing environment is deteriorating. U.S. prices fell roughly 7% in the fourth quarter, and Lilly expects low-to-mid single-digit percentage declines for 2026. A further complication comes from Washington: the government has delayed a planned Medicare pilot program covering weight-loss drugs, as major insurers like UnitedHealth remain hesitant. A transitional arrangement locks in prices at last year’s levels through 2027, which analysts say could act as a brake on revenue growth.
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A $6.3 Billion Bet Beyond Weight Loss
While the GLP-1 story grabs headlines, Lilly has been quietly reshaping its pipeline. The company recently announced plans to acquire Centessa Pharmaceuticals for $6.3 billion, a deal expected to close in the third quarter of 2026 pending shareholder, court, and regulatory approvals. Centessa brings a promising candidate for narcolepsy and other sleep disorders — what RBC analyst Brian Abrahams calls a “near-commercial billion-dollar market” that fills a gap in Lilly’s neuroscience portfolio.
The acquisition underscores Lilly’s strategy of diversifying beyond metabolic diseases, even as the weight-loss segment remains the primary driver of investor sentiment. Morgan Stanley’s Terence Flynn, a persistent bull on the stock, reiterated his “Overweight” rating with a $1,327 price target — roughly 52% above current levels. He sees Zepbound and Foundayo together generating up to $31 billion in U.S. revenue next year, with potential to reach $45 billion by 2030.
Valuation Leaves Little Room for Error
At a price-to-earnings ratio of 38, Lilly trades at more than double the average for U.S. pharmaceutical stocks. That premium reflects expectations of sustained high growth — and hinges on Foundayo overcoming its sluggish start. Thursday’s report will provide the first hard data point of the year to test that thesis.
For now, the market is taking a wait-and-see approach. The numbers on the surface look strong, but the story beneath them is one of recalibrated ambitions, pricing pressure, and a high-stakes product launch that has yet to find its footing.
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