Background of the Surprising Q1 Performance

Eli Lilly (LLY) recorded Q1 revenue of $19.8 billion in 2026, representing a remarkable 56% year-over-year growth. This exceeded the market consensus of $17.8 billion by more than 11%, marking a significant earnings surprise. This strong performance demonstrates Lilly's solid fundamentals, particularly ahead of the anticipated launch of its non-peptide small-molecule obesity treatment. The impressive results were driven by the explosive prescription growth of Tirzepatide-based diabetes drug Mounjaro and obesity treatment Zepbound in global markets. Reflecting this strong performance, Lilly raised its full-year 2026 revenue guidance from its previous forecast to $82 billion to $85 billion, demonstrating strong confidence in future growth.

Significance of FDA Approval for Oral Obesity Drug Foundayo

On April 1, 2026, Lilly received FDA approval for Foundayo (active ingredient: Orforglipron), the world's first once-daily oral non-peptide GLP-1 receptor agonist. This approval not only provides significant convenience for patients who are averse to injections but also allows for administration anytime without restrictions on water or food intake, maximizing medication adherence. Foundayo is considered a game-changer. In the Phase 3 ATTAIN-1 trial, patients with non-diabetes who took 36mg of Foundayo achieved an average weight loss of 12.4% at 72 weeks, demonstrating clinical efficacy comparable to injectable drugs, despite being an oral medication. This is expected to be a major turning point in shifting the paradigm of obesity treatment from injections to oral small-molecule therapies.

Zepbound Drives Strong Performance

Lilly's existing key product, Zepbound, generated approximately $4.2 billion in revenue in the U.S. market alone during the quarter, representing an 80% year-over-year increase. Although the realized price has slightly decreased due to price competition with competing products and the expansion of insurance coverage, the explosive growth in volume has more than offset this, driving overall revenue growth. The combined revenue of Zepbound and Mounjaro reached approximately $13 billion, playing a crucial role in securing Lilly's dominant position in the global metabolic disease treatment market. The expansion of the supply chain, which has alleviated supply shortages, has also contributed to maximizing revenue.

Competitive Landscape and Market Dominance in the Obesity Market

The global obesity treatment market is currently characterized by a duopoly between Novo Nordisk (NVO)'s Wegovy and Semaglutide oral formulation, Rybelsus. While Novo Nordisk is accelerating the development of oral obesity drugs, Lilly's early approval of Foundayo, a non-peptide oral drug, gives it a significant commercial advantage as the first mover in the small-molecule oral drug market. Given that competitors such as Pfizer (PFE)'s Danuglipron are facing challenges with clinical trial delays and adverse effects, Lilly's diversified portfolio is expected to further widen the gap with its competitors. In the obesity market, which is expected to grow to $150 billion by 2030, Lilly's market share is expected to become even more solid.