Eli Lilly’s Surge: How Zepbound and Mounjaro Reshaped Its Trajectory

Eli Lilly’s stock appreciated sharply between October 2025 and October 2026, outperforming both the S&P 500 and the healthcare sector. An investor who put $10,000 into Lilly (LLY) on October 14, 2025, would have held about $15,500 by October 15, 2026, while the same sum in the S&P 500 over the identical period would have yielded about $11,790, according to Trefis. This outperformance raises the question: What information was available before the run, and what signals did management send as it unfolded?

Core Drivers: Zepbound and Mounjaro

By mid-2026, Lilly’s results were dominated by two drugs: Zepbound and Mounjaro. Together, they accounted for roughly 65% of the company’s quarterly revenue, or $14.9 billion, in the quarter ended June 2026, an increase of $6.3 billion over the same quarter a year earlier. These growth figures fundamentally reshaped expectations as both products drove top-line gains.

As early as October 2024, during its Q3 call, Lilly's management highlighted these two drugs as the primary engines for growth, noting that new product revenue expanded by over $3 billion, led by Mounjaro and Zepbound. The focus was on production capacity as a limiting factor rather than demand. In that period, the quarter ending September 2024 saw revenue up 20.4% year-over-year, or 42% when excluding the company’s olanzapine portfolio. Management’s statements at the time centered on supply constraints amid already strong underlying growth.

Capacity Constraints and Financial Acceleration

Lilly’s public disclosures indicated that the main challenge remained scaling supply to meet demand. By the February 2025 earnings call, management reported that the company had successfully delivered on key production targets. Revenue for the quarter ended December 2024 grew 44.7% year-over-year; in the March 2025 quarter, growth was 45.2%.

Margins expanded as well: operating margin reached 45.1% in the June 2025 quarter, up from 38.8% in September 2024. That said, signs of revenue growth moderation surfaced by summer 2025, with June quarter growth slowing to 37.6%. Lilly filed no later quarter before October 14, 2025. Throughout the half-year window leading up to this date, when these positive trends were public, Lilly’s shares rose 7.7%. While signals were present, they were easier to interpret with hindsight.

Pricing, Volume, and Evolving Growth

US revenue growth in the June 2026 quarter was primarily volume-driven. Management reported that US revenue rose 33% due to higher sales volumes of Zepbound and Mounjaro, while US prices fell 9%, excluding a change in estimates for rebates and discounts. This demonstrates that growth was supported by rising prescriptions rather than price increases. Lilly is still investing in greater capacity, recently producing its first commercial batch at a new manufacturing site in Limerick, Ireland.

Growth, however, is showing signs of normalization. Revenue rose 47.7% year-over-year in the June 2026 quarter, compared with 55.5% in the March 2026 quarter: still strong growth, but slower than previous peaks. Combined sales of Zepbound and Mounjaro remain the key figure to monitor in upcoming earnings, expected on or around October 29, 2026.

How Lilly Compares With Merck

Lilly’s gains over the period were substantial but not unmatched. Merck, for example, returned 76.5% over the same twelve months, outpacing Lilly’s 55%. Management’s messaging around Zepbound and Mounjaro remained consistent before and after the stock run, focusing on manufacturing expansion and prescription strength. Changes in sector-wide prescription trends, competitive drug launches, or supply interruptions remain potential variables for future performance.