ELI LILLY & Co - Quarter Report: 2025 June (Form 10-Q)

Earnings per share:Basic$ $ $ $ Diluted$ $ $ $ Shares used in calculation of earnings per share:BasicDiluted

See notes to consolidated condensed financial statements.

Consolidated Condensed Statements of Comprehensive Income

(Unaudited)

ELI LILLY AND COMPANY

(Dollars in millions)


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Net income	$	$	$	$
Other comprehensive income (loss), net of tax (Note 11)		()		()
Comprehensive income	$	$	$	$

See notes to consolidated condensed financial statements.

Consolidated Condensed Balance Sheets

ELI LILLY AND COMPANY

(Dollars in millions)


	June 30, 2025	December 31, 2024
Assets	(Unaudited)
Current Assets
Cash and cash equivalents (Note 7)	$	$
Short-term investments (Note 7)
Accounts receivable, net of allowances of $ (2025) and $ (2024)
Other receivables
Inventories (Note 6)
Prepaid expenses (Note 8)
Other current assets
Total current assets
Investments (Note 7)
Goodwill
Other intangibles, net
Deferred tax assets
Property and equipment, net of accumulated depreciation of $ (2025) and $ (2024)
Other noncurrent assets
Total assets	$	$
Liabilities and Equity
Current Liabilities
Short-term borrowings and current maturities of long-term debt	$	$
Accounts payable
Employee compensation
Sales rebates and discounts
Dividends payable
Short-term income taxes payable
Other current liabilities
Total current liabilities
Noncurrent Liabilities
Long-term debt
Accrued retirement benefits (Note 9)
Long-term income taxes payable
Other noncurrent liabilities
Total noncurrent liabilities
Commitments and Contingencies (Note 10)
Eli Lilly and Company Shareholders' Equity
Common stock
Additional paid-in capital
Retained earnings
Employee benefit trust	()	()
Accumulated other comprehensive loss (Note 11)	()	()
Cost of common stock in treasury	()	()
Total Eli Lilly and Company shareholders' equity
Noncontrolling interests
Total equity
Total liabilities and equity	$	$

See notes to consolidated condensed financial statements.

Consolidated Condensed Statements of Shareholders' Equity

(Unaudited)

ELI LILLY AND COMPANY

Equity of Eli Lilly and Company Shareholders

(Dollars in millions, except per-share data, and shares in thousands)

Common Stock

Additional
Paid-in
Capital

Retained
Earnings

Employee Benefit Trust

Accumulated Other Comprehensive Loss

Common Stock in Treasury(1)

Noncontrolling Interests

Amount

Balance at April 1, 2024

()

Net income (loss)

()

Other comprehensive loss, net of tax

()

Cash dividends declared per share: $

()

Issuance of stock under employee stock plans, net

—

()

Stock-based compensation

Other

()

Balance at June 30, 2024

()

Balance at April 1, 2025

()

Net income

Other comprehensive income, net of tax

Cash dividends declared per share: $

()

Retirement of treasury shares

()

Purchase of treasury shares

()

Issuance of stock under employee stock plans, net

—

()

Stock-based compensation

Other

()

Balance at June 30, 2025

()

(1) billion remaining under our $ billion share repurchase program authorized in December 2024.

See notes to consolidated condensed financial statements.

Equity of Eli Lilly and Company Shareholders

(Dollars in millions, except per-share data, and shares in thousands)

Common Stock

Additional
Paid-in
Capital

Retained
Earnings

Employee Benefit Trust

Accumulated Other Comprehensive Loss

Common Stock in Treasury(1)

Noncontrolling Interests

Amount

Balance at January 1, 2024

()

Net income (loss)

()

Other comprehensive loss, net of tax

()

Cash dividends declared per share: $

()

Acquired in-process research and development

Other changes in operating assets and liabilities, net of acquisitions

()

Other operating activities, net

Net Cash Provided by Operating Activities

Cash Flows from Investing Activities

Purchases of property and equipment

()

Proceeds from sales of and distributions from noncurrent investments

Purchases of noncurrent investments

()

Cash paid for acquisitions, net of cash acquired

()

Purchases of in-process research and development

()

Other investing activities, net

()

Net Cash Used for Investing Activities

()

Cash Flows from Financing Activities

Dividends paid

()

Net change in short-term borrowings

()

Proceeds from issuance of long-term debt

Repayments of long-term debt

()

Purchases of common stock

()

Other financing activities, net

()

Net Cash Provided by Financing Activities

Effect of exchange rate changes on cash and cash equivalents

()

Net increase in cash and cash equivalents

Cash and cash equivalents at January 1

Cash and Cash Equivalents at June 30

See notes to consolidated condensed financial statements.

Notes to Consolidated Condensed Financial Statements

(Tables present dollars in millions, except per-share data, and numbers may not add due to rounding)

Note 1:

Note 2:

$ $ $

Collaboration and other revenue

Revenue$ $ $ $

We recognize revenue primarily from two different types of contracts, product sales to customers (net product revenue) and collaborations and other arrangements. Revenue recognized from collaborations and other arrangements includes our share of profits from the collaborations, as well as royalties, upfront, and milestone payments we receive under these types of contracts. See Note 4 for additional information related to our collaborations and other arrangements. Collaboration and other revenue disclosed above includes the revenue resulting from our collaboration with Boehringer Ingelheim discussed in Note 4, as well as the sale of product rights. Substantially all of the remainder of collaboration and other revenue is related to contracts accounted for as contracts with customers.

Adjustments to Revenue

Adjustments to revenue recognized as a result of changes in estimates for our most significant United States (U.S.) sales returns, rebates, and discounts liability balances for products shipped in previous periods were percent and less than percent of U.S. revenue during the three and six months ended June 30, 2025, respectively, and percent and percent of U.S. revenue during the three and six months ended 2024, respectively.

$ $ $ $ $ Zepbound Trulicity

Jardiance(1)

Other cardiometabolic health Total cardiometabolic health Oncology:Verzenio Other oncology Total oncology Immunology:Taltz Other immunology Total immunology Neuroscience Other Revenue$ $ $ $ $ $

(1) Jardiance revenue includes Glyxambi, Synjardy, and Trijardy XR.

$ $ $ $ $ Zepbound Trulicity

Jardiance(1)

Other cardiometabolic health Total cardiometabolic health Oncology:Verzenio Other oncology Total oncology Immunology:Taltz Other immunology Total immunology Neuroscience Other Revenue$ $ $ $ $ $

(1) Jardiance revenue includes Glyxambi, Synjardy, and Trijardy XR.

The following table summarizes revenue by geographical area:


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Revenue(1):
U.S.	$	$	$	$
Europe
Japan
China
Rest of world
Revenue	$	$	$	$

(1) Revenue is attributed to the countries based on the location of the customer or other party.

Note 3:

million, net of cash acquired. The facility expands our global parenteral (injectable) product manufacturing network.

Assets Acquired and Liabilities Assumed

Goodwill(1)

Property and equipmentOther assets and liabilities, net()Acquisition date fair value of consideration transferred Less: Cash acquired()Cash paid, net of cash acquired$

(1) The goodwill recognized from this acquisition is primarily attributable to the synergies between the manufacturing capabilities of the site and our products as well as the assembled workforce of the site, which is deductible for tax purposes.

We are unable to provide the results of operations for the three and six months ended June 30, 2025 attributable to this acquisition as the operations were substantially integrated into our legacy business.

Pro forma information has not been included as this acquisition did not have a material impact on our consolidated condensed statements of operations for the three and six months ended June 30, 2024.

Asset Acquisitions

Upon each asset acquisition, the cost allocated to acquired in-process research and development (IPR&D) was immediately expensed as acquired IPR&D if the compound had no alternative future use. Milestone payment obligations incurred prior to regulatory approval of the compound were expensed as acquired IPR&D when the event triggering an obligation to pay the milestone occurred.

We recognized acquired IPR&D charges of $ million and $ billion for the three and six months ended June 30, 2025, respectively, and $ million and $ million for the three and six months ended June 30, 2024, respectively. The acquired IPR&D charges for the six months ended June 30, 2025 were primarily related to the first quarter acquisition of Scorpion Therapeutics, Inc.'s (Scorpion's) PI3Kα inhibitor program STX-478, currently being evaluated in a Phase 1/2 clinical trial for breast cancer and other advanced solid tumors. We recognized no other significant acquired IPR&D charges during the three and six months ended June 30, 2025 and 2024.

per share in cash (or an aggregate of approximately $ billion), plus non-tradeable contingent value right (CVR) per share that entitles the holder to receive up to an additional $ per share, for a total potential consideration of up to $ per share in cash without interest (or an aggregate of up to approximately $ billion), subject to certain terms and conditions, upon the achievement of a certain specified milestone. Verve is developing genetic medicines for cardiovascular disease.

In July 2025, we acquired SiteOne Therapeutics, Inc. (SiteOne). Under the terms of the agreement, we could pay up to $ billion in cash, inclusive of an upfront payment and subsequent payments upon achievement of certain regulatory and commercial milestones. Through the acquisition we acquired STC-004, a Nav1.8 inhibitor being studied for the treatment of pain.

Our access to Verve and SiteOne information was limited prior to the acquisitions. As a consequence, we are in the process of determining the fair values of the assets acquired and liabilities assumed and the associated accounting treatments.

Note 4:

$ $ $

In the first quarter of 2025, we and Boehringer Ingelheim amended our collaboration to adjust commercialization responsibilities for the Jardiance product family in certain markets, resulting in our recognition of a one-time benefit of $ million as Jardiance revenue during the six months ended June 30, 2025. Resulting from recent amendments, we have the right to receive up to $ million in potential sales-based milestones related to the Jardiance product family in certain markets through December 31, 2026. No such sales-based milestones were recognized as of June 30, 2025.

Ebglyss

We have a license agreement with F. Hoffmann-La Roche Ltd and Genentech, Inc. (collectively, Roche), which provides us the worldwide development and commercialization rights to lebrikizumab, which is branded and trademarked as Ebglyss. Roche receives tiered royalty payments on worldwide net sales ranging in percentages from high single digits to high teens, which we recognize as cost of sales. As of June 30, 2025, Roche is eligible to receive additional payments from us, including up to $ billion in potential sales-based milestones. During the three and six months ended June 30, 2025 and 2024, milestone payments to Roche were not material.

We have a license agreement with Almirall, S.A. (Almirall), under which Almirall licensed the rights to develop and commercialize Ebglyss, for the treatment or prevention of dermatology indications, including, but not limited to, atopic dermatitis in Europe. We receive tiered royalty payments on net sales in Europe ranging in percentages from low double digits to low twenties, which we recognize as collaboration and other revenue. During the three and six months ended June 30, 2025 and 2024, collaboration and other revenue recognized under this license agreement was not material. As of June 30, 2025, we are eligible to receive additional payments up to $ billion in a series of sales-based milestones.

Orforglipron

We have a license agreement with Chugai Pharmaceutical Co., Ltd (Chugai), which provides us with the worldwide development and commercialization rights to orforglipron. Chugai has the right to receive tiered royalty payments on future worldwide net sales from mid-single digits to low teens if the product is successfully commercialized. As of June 30, 2025, Chugai is eligible to receive up to $ million contingent upon the achievement of success-based regulatory milestones and up to $ million in a series of sales-based milestones, contingent upon the commercial success of orforglipron. During the three and six months ended June 30, 2025 and 2024, milestone payments to Chugai were not material.

Note 5:

million for the six months ended June 30, 2025 and $ million for the three and six months ended June 30, 2024. The charges recognized during the three and six months ended June 30, 2024 were related to litigation. See Note 10 for additional information.

Note 6:

$ Work in process Raw materials and supplies Total (approximates replacement cost) (Decrease) increase to last-in, first-out (LIFO) cost() Inventories$ $

When we believe that future commercialization is probable and the future economic benefit is expected to be realized, we capitalize pre-launch inventory prior to regulatory approval. A number of factors are considered, including the current status in the regulatory approval process, potential impediments to the approval process such as safety or efficacy, viability of commercialization, and marketplace trends. Pre-launch inventories capitalized as of June 30, 2025 and December 31, 2024 were $ million and $ million, respectively, primarily related to orforglipron.

Note 7:

Adjustments recorded for the three and six months ended June 30, 2025 and 2024 were not material.

The net gains (losses) recognized in our consolidated condensed statements of operations for equity securities were $ million and $() million for the three and six months ended June 30, 2025, respectively, and $() million and $() million for the three and six months ended June 30, 2024, respectively. The net gains (losses) recognized for the three and six months ended June 30, 2025 and 2024 on equity securities sold during the respective periods were not material.

As of June 30, 2025, we had approximately $ million of unfunded commitments to invest in venture capital funds, which we anticipate will be paid over a period of up to years.

Impairment and credit losses related to available-for-sale securities were not material for the three and six months ended June 30, 2025 and 2024.

$ $ $ $ $ Unrealized gross losses Fair value of securities in an unrealized gain position Fair value of securities in an unrealized loss position

As of June 30, 2025, the available-for-sale securities in an unrealized loss position include primarily fixed-rate debt securities of varying maturities, which are sensitive to changes in the yield curve and other market conditions. Substantially all of the fixed-rate debt securities in a loss position are investment-grade debt securities. As of June 30, 2025, we do not intend to sell, and it is not more likely than not that we will be required to sell, the securities in a loss position before the market values recover or the underlying cash flows have been received, and there is no indication of a material default on interest or principal payments for our debt securities.

Realized gains and losses on sales of available-for-sale investments are computed based upon specific identification of the initial cost adjusted for any other-than-temporary declines in fair value that were recorded in earnings and were not material for the three and six months ended June 30, 2025 and 2024. Proceeds from sales of available-for-sale investments were $ million and $ million for the three and six months ended June 30, 2025, respectively, and $ million and $ million for the three and six months ended June 30, 2024, respectively.

$ $ $ $ $ Short-term investments:U.S. government and agency securities$ $ $ $ $ $ Corporate debt securities Other securities Short-term investments$ Noncurrent investments:U.S. government and agency securities$ $ $ $ $ $ Corporate debt securities Mortgage-backed securities Asset-backed securities Other securities Marketable equity securities

Equity investments without readily determinable fair values(3)

Equity method investments(3)

Noncurrent investments$ December 31, 2024

Cash equivalents(2)

$ $ $ $ $ $ Short-term investments:U.S. government and agency securities$ $ $ $ $ $ Corporate debt securities Asset-backed securities Other securities Short-term investments$ Noncurrent investments:U.S. government and agency securities$ $ $ $ $ $ Corporate debt securities Mortgage-backed securities Asset-backed securities Other securities Marketable equity securities

Equity investments without readily determinable fair values(3)

Equity method investments(3)

Noncurrent investments$

(1) For available-for-sale debt securities, amounts disclosed represent the securities' amortized cost.

(2) We consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. The cost of these investments approximates fair value.

(3) Fair value disclosures are not applicable for equity method investments and investments accounted for under the measurement alternative for equity investments.

billion of percent fixed-rate notes due in 2028, $ billion of percent fixed-rate notes due in 2030, $ billion of percent fixed-rate notes due in 2032, $ billion of percent fixed-rate notes due in 2035, $ billion of percent fixed-rate notes due in 2055, and $ million of percent fixed-rate notes due in 2065, all with interest to be paid semi-annually. We used a portion of the net cash proceeds from this offering to fund the acquisition of Scorpion's PI3Kα inhibitor program STX-478 and related fees and expenses, with any remaining funds used for general business purposes, including the repayment of commercial paper.

In February 2024, we issued $ billion aggregate principal amount of notes. We used the net cash proceeds from this offering for general business purposes, including the repayment of commercial paper, and the repayment of then-current maturities of long-term debt.

Fair Value of Debt

$ $ $ $ December 31, 2024 Long-term debt, including current portionJune 30, 2025 December 31, 2024

Risk Management and Related Financial Instruments

Financial instruments that potentially subject us to credit risk consist principally of trade receivables and interest-bearing investments. Wholesale distributors of our products account for a substantial portion of our trade receivables; collateral is generally not required. We seek to mitigate the risk associated with this concentration through our ongoing credit-review procedures and insurance. The majority of our cash is held by a few major financial institutions that have been identified as Global Systemically Important Banks (G-SIBs) by the Financial Stability Board. G-SIBs are subject to rigorous regulatory testing and oversight and must meet certain capital requirements. We monitor our exposures with these institutions and do not expect any of these institutions to fail to meet their obligations. In accordance with documented corporate risk-management policies, we monitor the amount of credit exposure to any one financial institution or corporate issuer based on the credit rating of our counterparty. We are exposed to credit-related losses in the event of nonperformance by counterparties to risk-management instruments but do not expect significant counterparties to fail to meet their obligations given their investment grade credit ratings.

We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over, and risk related to, the receivables to the buyers. We derecognized $ million and $ million of accounts receivable as of June 30, 2025 and December 31, 2024, respectively, under these factoring arrangements. The costs of factoring such accounts receivable as well as estimated credit losses were not material for the three and six months ended June 30, 2025 and 2024.

billion and $ billion as of June 30, 2025 and December 31, 2024, respectively, of which $ billion and $ billion have been designated as, and are effective as, hedges of net investments in certain of our foreign operations as of June 30, 2025 and December 31, 2024, respectively. At June 30, 2025, we had outstanding cross-currency interest rate swaps with notional amounts of million Swiss francs swapping Swiss francs to U.S. dollars, with settlement dates ranging through 2028. Our cross-currency interest rate swaps have been designated as, and are effective as, cash flow hedges. At June 30, 2025, we had outstanding foreign currency forward contracts to sell billion euro and to sell billion Chinese yuan with settlement dates ranging through 2025, which have been designated as, and are effective as, hedges of net investments.

Forward contracts generally have maturities not exceeding months. days:

U.S. dollarsU.S. dollarsEuroU.S. dollarsBritish poundsU.S. dollarsChinese yuanU.S. dollarsJapanese yen

At June 30, 2025, all of our total long-term debt is at a fixed rate. We have converted approximately percent of our long-term fixed-rate notes to floating rates through the use of interest rate swaps.

The Effect of Risk-Management Instruments on the Consolidated Condensed Statements of Operations

$()$ $()Effect from interest rate contracts() () Cash flow hedges:Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss Cross-currency interest rate swaps() () Net (gains) losses on foreign currency exchange contracts not designated as hedging instruments() () Total$()$ $()$

During the three and six months ended June 30, 2025 and 2024, the amortization of losses related to the portion of our risk management hedging instruments, fair value hedges, and cash flow hedges that was excluded from the assessment of effectiveness was not material.

The Effect of Risk-Management Instruments on Other Comprehensive Income (Loss)

)$ $()$ Cross-currency interest rate swaps() () Foreign currency forward contracts() () Cash flow hedges:Forward-starting interest rate swaps () Cross-currency interest rate swaps ()

Note 8:

percent and percent for the three and six months ended June 30, 2025, respectively, compared to percent and percent for the three and six months ended June 30, 2024, respectively. The effective tax rate for the six months ended June 30, 2025 included the unfavorable tax impact of a non-deductible acquired IPR&D charge. The effective tax rates for the three and six months ended June 30, 2024 reflected the favorable tax impact of asset impairment, restructuring and other special charges.

At June 30, 2025 and December 31, 2024, prepaid expenses included prepaid taxes of $ billion and $ billion, respectively.

The U.S. examination of tax years 2019-2021 remains ongoing. For tax years 2016-2018, we are pursuing competent authority assistance through the Mutual Agreement Procedure process for the pricing of certain intercompany transactions. The resolution of both audit periods will likely extend beyond the next 12 months.

Subsequent Events

% for the year ending December 31, 2025, while decreasing income tax payments during the second half of 2025.

Note 9:

$ $ $ Interest cost Expected return on plan assets()()()()Amortization of prior service cost Recognized actuarial loss Net periodic cost$ $ $ $

) )


	Retiree Health Benefit Plans
	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Components of net periodic benefit:
Service cost	$	$	$	$
Interest cost
Expected return on plan assets	()	()	()	()
Amortization of prior service benefit	()	()	()	()
Recognized actuarial gain	()	()	()	()

()




()



()

)$()$()$ $()Other comprehensive income (loss) before reclassifications ()() Net amount reclassified from accumulated other comprehensive loss Net other comprehensive income (loss) ()()

Balance at June 30, 2025

$()$()$()$ $()


(Amounts presented net of taxes)	Foreign Currency Translation Gains (Losses)			Net Unrealized Gains (Losses) on Available-For-Sale Securities			Retirement Benefit Plans			Net Unrealized Gains (Losses) on Cash Flow Hedges			Accumulated Other Comprehensive Loss
Balance at January 1, 2024	$	()		$	()		$	()		$			$	()

Other comprehensive income (loss) before reclassifications	()			()									()
Net amount reclassified from accumulated other comprehensive loss
Net other comprehensive income (loss)	()			()									()

2025			2024			2025			2024
Amortization of retirement benefit items:
Prior service costs (benefits), net	$			$	()		$			$	()	Other–net, (income) expense
Actuarial losses, net												Other–net, (income) expense
Total before tax
Tax benefit	()			()			()			()		Income taxes
Net of tax

Other, net of tax												Other–net, (income) expense

Total reclassifications, net of tax	$			$			$			$

Note 12:

$ $ $ Interest income()()()()Net investment (gains) losses on equity securities (Note 7)() Retirement benefit plans()()()()

The following table summarizes our revenue, including net product revenue and collaboration and other revenue, by product for the six months ended June 30, 2025 and 2024:


	Six Months Ended June 30,								Percent Change
	2025						2024
	U.S.		Outside U.S.		Total		Total
Mounjaro	$	5,957.7	$	3,083.0	$	9,040.7	$	4,897.4	85
Zepbound	5,685.4		7.9		5,693.3		1,760.6		NM
Verzenio	1,586.6		1,061.5		2,648.2		2,382.2		11
Other products	6,074.0		4,830.1		10,904.0		11,030.6		(1)
Revenue	$	19,303.7	$	8,982.5	$	28,286.2	$	20,070.8	41

NM - not meaningful

Revenue of Mounjaro increased 37 percent and 51 percent in the U.S. during the three and six months ended June 30, 2025, respectively, reflecting strong demand, partially offset by lower realized prices. Revenue outside the U.S. during the three and six months ended June 30, 2025 was $1.90 billion and $3.08 billion, respectively, compared to $677.2 million and $963.4 million during the three and six months ended June 30, 2024, respectively, primarily driven by volume growth, including from entry into new markets.

Revenue of Zepbound in the U.S. during the three and six months ended June 30, 2025 was $3.38 billion and $5.69 billion, respectively, compared to $1.24 billion and $1.76 billion during the three and six months ended June 30, 2024, respectively, primarily driven by increased demand, partially offset by lower realized prices.

Revenue of Verzenio increased 8 percent and 6 percent in the U.S. during the three and six months ended June 30, 2025, respectively, primarily driven by volume growth. Revenue outside of the U.S. increased 19 percent and 20 percent during the three and six months ended June 30, 2025, respectively, primarily driven by volume growth.

Gross Margin, Costs, and Expenses

The following table summarizes our gross margin, costs, and expenses:


	Three Months Ended June 30,						Percent Change	Six Months Ended June 30,						Percent Change
	2025			2024				2025			2024

Gross margin	$	13,109.9		$	9,132.6		44	$	23,614.2		$	16,227.1		46
Gross margin as a percent of revenue	84.3		%	80.8		%		83.5		%	80.8		%

* Filed herewith.

Long-term debt instruments under which the total amount of securities authorized does not exceed 10 percent of our consolidated assets are not filed as exhibits to this Quarterly Report. We will furnish a copy of these agreements to the Securities and Exchange Commission upon request.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


		ELI LILLY AND COMPANY
		(Registrant)

Date:	August 7, 2025	/s/ Lucas Montarce
		Lucas Montarce
		Executive Vice President and Chief Financial Officer
Date:	August 7, 2025	/s/ Donald Zakrowski
		Donald Zakrowski
		Senior Vice President, Finance, and Chief Accounting Officer

ELI LILLY & Co - Quarter Report: 2025 June (Form 10-Q)

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