The demand for weight loss drugs remains strong! Eli Lilly (LLY.US) beats expectations across all aspects in its earnings report, with the stock soaring over 8% pre-market.

Eli Lilly (LLY.US) announced on Wednesday that its Q4 revenue, profit, and 2026 earnings guidance all significantly exceeded market expectations, primarily driven by surging demand for its flagship weight-loss drug Zepbound and diabetes treatment Mounjaro. Boosted by this, the company’s stock surged over 8% in pre-market trading.

Currently, the GLP-1 drug market is experiencing explosive growth. Despite facing competition from telemedicine companies selling inexpensive generic drugs and a price reduction agreement with the U.S. government, Eli Lilly is seizing growth opportunities amid the rising demand for weight-loss medications.

Additionally, Eli Lilly’s competitor Novo Nordisk’s new oral weight-loss drug Wegovy recently launched in the U.S. market and has seen a surge in sales. In this context, Eli Lilly is taking multiple measures to solidify its dominance in this sector. Its internally developed oral weight-loss drug Orforglipron is expected to be approved and launched later this year.

The financial report shows that Eli Lilly’s Q4 revenue was $19.29 billion, a 43% increase from the same period last year, far exceeding analysts’ expectations of $17.96 billion. U.S. market revenue reached $12.9 billion. Lilly stated that this was mainly due to a 50% surge in sales (prescription volume or sales quantity) of its products, especially Mounjaro and Zepbound, partially offsetting the decline in their actual prices.

It is understood that in November last year, Eli Lilly and Novo Nordisk (NVO.US) reached a milestone agreement with U.S. President Trump, announcing price reductions for their core weight-loss and diabetes drugs.

According to the agreement, starting in 2026, Lilly and Novo Nordisk will lower the prices of their relevant drugs for beneficiaries of Medicare and Medicaid in the U.S. They will also provide discounts directly to consumers through Trump’s government-created direct-to-consumer drug purchasing platform TrumpRx (not yet launched).

In exchange, both pharmaceutical companies will receive a three-year tariff exemption.

Eli Lilly CEO Dave Ricks admitted in an interview last Friday that, under this drug pricing agreement, the prices of the company’s core drugs will be reduced early this year. However, he also stated that sales growth of its drugs is expected to accelerate in the second half of this year.

In Q4, Zepbound sales reached $4.3 billion, above the expected $3.8 billion; Mounjaro sales hit $7.4 billion, also higher than the expected $6.7 billion. Mounjaro is increasingly popular outside the U.S., with overseas revenue reaching $3.3 billion.

On the profit side, Eli Lilly posted a net profit of $6.64 billion in Q4, or $7.39 per share, compared to $4.41 billion, or $4.88 per share, in the same period last year. Excluding one-time items related to intangible asset valuation and other adjustments, Lilly’s adjusted EPS for Q4 was $7.54, higher than the market expectation of $6.67.

Looking ahead, this pharmaceutical giant expects full-year 2026 revenue to be between $80 billion and $83 billion, compared to analyst expectations of $77.62 billion. For profits, Lilly projects an adjusted EPS of $33.50 to $35 in 2026, while analysts generally expect $33.23.