Eli Lilly CFO Lucas Montarce Talks Weight Loss Pill, Business Outlook

Summary

Overview

In this episode of Bloomberg Talks, Eli Lilly’s CFO Lucas Montarce joins to discuss the company’s ambitious growth outlook for 2026, the rollout and approval status of its highly anticipated oral weight loss medication (orphoglipron), the impact of pricing pressures, expanded Medicare access for anti-obesity drugs, and recent product approvals. The conversation is wide-ranging, offering insights into how Eli Lilly is managing market expectations, regulatory timelines, and competitive forces in the booming market for obesity and diabetes treatments.

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Key Discussion Points & Insights

1. Industry-Leading Growth & 2026 Outlook

• Projected Growth: Lilly is forecasting a 25% revenue increase for 2026—a rate described as “industry leading.”
• Momentum: Q4 2025 saw 43% revenue growth, reflecting continued momentum as key products drive expansion.
• Major Drivers: Growth is attributed not just to incretin-based therapies (notably in obesity and type 2 diabetes) but also a diverse product pipeline.

“25% is the midpoint of the growth that we expect to see in 2026—it’s industry leading growth and that’s a continuation of the momentum that we see as well in 2025.”
— Lucas Montarce (00:08)

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2. Orphoglipron (Oral Weight Loss Pill): Approval Timeline & Market Opportunity

• Regulatory Status: Orphoglipron was submitted for approval in Q4; action from the FDA is expected as early as Q2 2026, pending regulatory review.
• Market Impact: The oral pill is anticipated to greatly expand access and patient uptake, particularly among populations not served by injectables.
• Investor Interest: While investors are laser-focused on orphoglipron’s potential, Lilly’s current outlook does not factor in unproven upside from the product.

“We submitted for regulatory approval in the fourth quarter and we expect to have regulatory action as early as Q2...a very exciting opportunity to expand the market.”
— Lucas Montarce (00:45)

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3. Pricing Pressures & Strategy

• Industry Context: Both Lilly and competitor Novo Nordisk are facing significant pricing declines (low to mid teens) due to competition, payer negotiations, and expanded access.
• Proactive Strategy: Lilly has already incorporated anticipated price erosion into its 2026 forecast. Key pricing moves include a $50 reduction direct-to-patient, and agreed Medicare pricing at $245.
• Offset by Volume: While prices are declining, volume growth—especially in anti-obesity drugs and type 2 diabetes—more than offsets reductions.

“There is no news from my perspective in terms of the pricing dynamics—it’s still going to be price erosion versus last year, that’s included in our guide. Very strong volume growth that we expect to see that will more than offset that to get to that 25%.”
— Lucas Montarce (03:53)

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4. Market Expansion: Obesity & Diabetes

• Market Size: Over 100 million patients in the U.S. and 900 million globally could benefit from anti-obesity medicines; current penetration remains in the low single digits.
• Runway for Growth: Q4 U.S. anti-obesity market grew by 85%, but opportunity for further expansion is vast.

“We are talking about more than 100 million patients in the US that we can serve… nowadays we are serving low single digits, so the penetration is low. There is a big opportunity to continue to drive that growth.”
— Lucas Montarce (05:23)

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5. Medicare Access & Implications

• Expanded Access by July 2026: With a new agreement, over 40 million Medicare patients could gain access to anti-obesity medications, including orphoglipron and tirzepatide, starting mid-2026.
• Cost to Patients: The standard copay for Medicare patients will be $50 per prescription, broadening affordability and access.

“Once that access is provided… both molecules will have access to Medicare patients and the patients will pay actually $50 will be the co pay… starting off July, hopefully we will see that penetration growing over time.”
— Lucas Montarce (07:21)

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6. Quick Pen Approval & Rollout

• Product Launch: The Quick Pen injector recently received approval and is set for broad market launch within 30 days—a move timed with expanded Medicare and direct-to-patient access.
• Channel Expansion: Quick Pen will be available to both Medicare and non-Medicare patients, with emphasis on providing multiple delivery options for various markets.

“We are planning to bring it to the market within the next 30 days… we will bring it in direct to patients so that we will have more broad access—it’s another opportunity, another option for patients.”
— Lucas Montarce (08:25)

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Notable Quotes & Memorable Moments

• “There is no single pharma company growing at this pace. So we feel good.”
  — Lucas Montarce (02:16)

• “We have been very disciplined on our pricing strategy… and my commitment is to maintain that price discipline getting into 2026 as well.”
  — Lucas Montarce (06:21)

• “We will bring it in direct to patients so that we will have more broad access.”
  — Lucas Montarce (08:25)

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Timestamps of Key Segments

• 00:08 – Lucas outlines Eli Lilly’s 2026 revenue guidance and growth drivers
• 00:45 – Discussion of orphoglipron oral pill and regulatory approval timeline
• 02:16 – Outlook on financial guidance and potential upside from new launches
• 03:09 – Update on FDA process and expectations
• 03:53 – Discussion of pricing pressures, Medicare pricing, and strategy
• 05:23 – Market size for obesity and type 2 diabetes; volume opportunity
• 06:21 – Further detail on pricing discipline and Medicare access
• 07:21 – Impact and logistics of expanded Medicare access for anti-obesity medicines
• 08:25 – Approval and launch plans for Quick Pen device

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Summary Flow & Tone

The conversation was direct, data-driven, and optimistic about near-term growth, with Montarce reiterating confidence in Eli Lilly’s ability to sustain strong performance even in the face of pricing challenges. The interview balanced investor concerns (pricing, access, regulatory hurdles) with bullish commentary on Lilly’s pipeline and disciplined execution.

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For listeners seeking a concise but comprehensive look at the state of Eli Lilly’s anti-obesity franchise, business strategy, and market prospects, this episode provides key details and forward-looking insights.

Transcript

[A]

Bloomberg Audio Studios Podcasts Radio News we.

[B]

Release our guide for 2026. 25% is the midpoint of the growth that we expect to see in 2026 is industry leading growth and that's a continuation of the momentum that we see as well in 2025. By the way, thinking about the Q4 that we also release, the revenue that we deliver in the fourth quarter, we deliver 43% growth. So is a continuation of that strong momentum getting into 2026. What is driving that is the similar drivers, the key growth products that we have. Of course the Incretin is getting all the attention, but we have a breadth of a portfolio across all our therapeutic areas that will continue to drive that growth into 2026. Thinking about the drivers that you mentioned, we talk about the Incretin portfolio both in the US and all US. You see that the market in the fourth quarter on the anti obesity space grew 80 and we actually outpaced that growth in the fourth quarter and very strong growth as well in type 2 diabetes 17%. So we continue to drive that growth into 2026. You mentioned as well the introduction of our Foglipron. Very excited. We submitted for regulatory approval in the fourth quarter and we expect to have regulatory action as early as Q2. So expect to see as well our oral pill coming into the market, a very exciting opportunity to expand the market. In addition to that, we are expanding through axis as well with the agreement that we have signed with the administration in Medicare that we expect not later than July will provide access to Medicare patients, more than 40 million patients that could benefit to have access to anti obesity medications as well. So very exciting time, very exciting opportunity ahead of us.

[C]

So Lucas, there's a lot to dig into there and you mentioned of course the breadth of your portfolio, but investors really, really care about the pill at this moment. So I have to ask a little bit more about that. You mentioned that potential to Q launch. Is there a possibility that this outlook that you gave this morning gets upgraded as we start to see some of the uptake there?

[B]

Yeah, it's early days at this time. We just put the guide out there. We have a very thorough process and we feel good about. The guide that we have in place for 2026 is still very compelling by the way, 25%. There is no single pharma company growing at this pace. So we feel about good. We can see throughout the year if we see that continue to trend in the positive direction. But at this time, given all the variables that we have, we feel good about the guide that we have in place.

[C]

And so let's talk about the timeline a little bit more here. You and I spoke a few weeks ago at the J.P. morgan Health Care Conference. You said that you're on track for that second quarter approval. You reiterated that timeline today, of course, pending FDA approval. Let's talk a little bit about the fda. There's been some challenges there. There's been some turnover. Do you see that potentially impacting the timeline at all.

[B]

At this time? We are engaging with the FDA and we feel good about the progress. And so the time that, that I cover in JP Morgan that you alluded to is still consistent with our expectation that we expect to see regulatory action as early as Q2.

[C]

All right, well, we're almost in the second quarter, so we'll keep looking for updates there. I want to talk about pricing as well, because you take a look at this headline, you see global pricing declines in the low to mid teens. This caught my eye because of course, Novo Nordisk came out with that early release yesterday. And then they said on their earnings call this morning that they're facing unprecedented pricing pressure this year. So talk us through that, what that means for Eli Lilly and how you plan to make that up.

[B]

Yeah, well, actually the guide 25% is encompassing as well, the price step up or step down that we have in 2026. So that's included in our guide for 2026 already. When you think about the variables, they are all actually out there. We talk about the, the agreement with the administration, those prices are public. We talk about direct to patient that we adjust the price by $50 across all our presentations. That's actually already implemented in the marketplace as of last December. And then we have the Medicare access that again, we have a price of $2.45. That's also public price, public information out there as well. So those variables are out there. There is no news from my perspective in terms of the pricing dynamics is still going to be a price erosion versus last year that's included in our guide. Very strong volume growth that we expect to see that will more than offset that to get to that 25% that we have in our guide.

[C]

Well, the dynamic is really interesting between pricing and volume. Another line in your earnings release that caught my eye was that you take a look at US revenue. It increased 43%. That was driven by a 50% increase in volume, but it was partially offset by, by that 7% decrease due to those lower realized prices. So is the hope that, you know, you think about some of the Things in the pipeline, the pill being one of them, is the hope that that's going to help expand the market and thus expand volume. As you see that price erosion.

[B]

Yeah, that's very important. As you mentioned, again, when you think about the volume growth and the volume opportunity in particular, starting with both obesity and type 2 diabetes or we have a large opportunity, both segments are really large. In particular antibiosida medications. We are talking about more than 100 million patients in the US that we can serve. And then globally There is another 900 million patients that we can serve as well. Nowadays we are serving low single digits, so the penetration is low. So there is a big opportunity to continue to drive that growth. The fourth quarter I mentioned that the market in the US grew 85%. So there is a very big Runway to continue to drive growth into the future. That that's reflected on our volume growth expectation for 2026.

[C]

And you touched on this a little bit, Lucas, but I do want to talk a little bit more about MF and pricing there. What would impact would you expect that to have on your weight loss sales this year?

[B]

So the impact is included in that guide that I talk about. Again, the low to mid teens in price erosion that that's reflected in that price is in that price guide that we have for the year. And the prices as I mentioned, are public that to 45 for the government segment and the public prices that we have in direct to patients, including the adjustment that we did for $50. So all these public prices, we have been very disciplined on our pricing strategy. You can look at their results quarter on quarter that we maintain that discipline throughout 2025. And my commitment is to maintain that price discipline getting into 2026 as well.

[C]

All right, fair enough. And I do I should bring up Medicare access as well because expanding Medicare access, that is certainly top of mind for investors. And I'd love to hear from your perspective, how do you see that wider access impacting the market? And again, when it comes to the Pill, would you expect that to be available to Medicare patients at launch?

[B]

That's a great point. Of course, again, not only Tirzepatide, again sep bound, but also orfoglipron will be available in the Medicare segment once that access is provided. So both molecules will have access to Medicare patients and the patients will pay actually $50 will be the co pay that the patients will be paying for both medicines. So great opportunity to drive access. I mentioned 40 million patients. As always, penetrations will build over time. So starting off July, hopefully we will see that penetration growing over time. So that will build not only in 2026, but also getting into 2027 as well.

[C]

And Lucas, before I let you go, one thing that has changed since you and I spoke a couple of weeks ago back in January is that your Zeppelin Quick Pen and actually won approval last month. As I understand it, that product is tied to your deal that you have approximately with the Trump administration. So talk us through the rollout here. Do you plan to make Quick Pen available to all patients or would it only be an option for those Medicare patients?

[B]

Yeah, it's great news. By the way. I'm, I'm glad that you brought it up because you asked me about the Quick Pen approval and again, it has been three weeks and now we have the Quick Pen approval and we are planning to bring it to the market within the next 30 days. So that would bring another option. Of course, again, we will are discussing about the channel segments you mentioned, Medicare being one of them. But also we will bring it in direct to patients so that we will have more broad access is another opportunity, another option for patients that will have the opportunity to get to the equipment device. By the way, the equipment device is one that we have available in many countries globally with great acceptance as well.

[C]

All right, Lucas, thank you so much. I know it's a busy morning, so really appreciate you taking the time for us.