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October 30,2025For release:ImmediatelyRefer to:Ashley Hennessey;gentry_ashley_;(317)416-4363(Media)Mike Czapar;czapar_michael_;(317)617-0983(Investors)Lilly reports third-quarter 2025 financial results,highlights R&D pipeline momentum and raises 2025 guidance Revenue in Q3 2025 increased 54%to$17.60 billion driven by volume growth from Mounjaro and Zepbound.Q3 2025 EPS increased by$5.14 to$6.21 on a reported basis and increased by$5.84 to$7.02 on a non-GAAP basis.Increased our 2025 full-year revenue guidance to be in the range of$63.0 billion to$63.5 billion;reported EPS guidance raised to be in the range of$21.80 to$22.50 and non-GAAP EPS guidance raised to be in the range of$23.00 to$23.70.Pipeline progress included positive results in four Phase 3 trials of orforglipron,across type 2 diabetes and obesity,with plans to submit to global regulatory authorities by the end of the year for the treatment of obesity.Regulatory progress included U.S.FDA approval of Inluriyo(imlunestrant)for certain adults with advanced or metastatic breast cancer.Manufacturing progress included announcements of two new facilities in Virginia and Texas,and the expansion of Lillys existing Puerto Rico site.INDIANAPOLIS,October 30,2025-Eli Lilly and Company(NYSE:LLY)today announced its financial results for the third-quarter of 2025.“Lilly delivered another strong quarter,with 54%revenue growth year-over-year driven by continued demand for our incretin portfolio,”said David A.Ricks,Lilly chair and CEO.“We advanced orforglipron through four additional Phase 3 trials,enabling global obesity submissions by year-end,and we achieved U.S.FDA approval of Inluriyo(imlunestrant)marking key progress across our pipeline.We continue to increase manufacturing capacity,announcing new facilities in Virginia and Texas and an expansion of our site in Puerto Rico.”Eli Lilly and Company|Lilly Corporate Center|Indianapolis,Indiana 46285|U.S.A.Financial Results$in millions,except per share dataThird-Quarter20252024%ChangeRevenue$17,600.8$11,439.1 54%Net income Reported 5,582.5 970.3 NMEarnings per share Reported 6.21 1.07 NMNet income Non-GAAP 6,311.9 1,064.5 NMEarnings per share Non-GAAP 7.02 1.18 NMA discussion of the non-GAAP financial measures is included below under Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information(Unaudited).Third-Quarter Reported ResultsIn Q3 2025,worldwide revenue was$17.60 billion,an increase of 54%compared with Q3 2024,driven by a 62%increase in volume,partially offset by a 10crease due to lower realized prices.Key Products1 revenue grew to$11.98 billion in Q3 2025,led by Mounjaro and Zepbound.Revenue in the U.S.increased 45%to$11.30 billion,driven by a 60%increase in volume,partially offset by a 15crease due to lower realized prices.Price was negatively impacted by a favorable one-time adjustment to estimates for rebates and discounts in Q3 2024.Excluding this base period effect,U.S.price declined by high single digits.Revenue outside the U.S.increased 74%to$6.30 billion,driven by a 66%increase in volume and to a lesser extent a 6vorable impact on foreign exchange rates.The volume increase outside the U.S.was driven primarily by Mounjaro.Revenue included a$200.0 million sales-based milestone payment for Jardiance and$180.0 million of revenue associated with the divestiture of the rights to Cialis in select markets outside of the U.S.21 The Company defines Key Products as Ebglyss,Jaypirca,Kisunla,Mounjaro,Omvoh,Verzenio,and Zepbound.Gross margin increased 57%to$14.59 billion in Q3 2025.Gross margin as a percent of revenue was 82.9%,an increase of 1.9 percentage points.The increase in gross margin percent was primarily driven by favorable product mix,partially offset by lower realized prices.In Q3 2025,research and development expenses increased 27%to$3.47 billion,or 19.7%of revenue,driven by continued investments in the companys early and late-stage portfolio.Marketing,selling and administrative expenses increased 31%to$2.74 billion in Q3 2025,primarily driven by promotional efforts supporting ongoing and future launches.In Q3 2025,the company recognized acquired in-process research and development(IPR&D)charges of$655.7 million compared with$2.83 billion in Q3 2024.The Q3 2025 charges primarily related to the acquisition of SiteOne Therapeutics,Inc.The Q3 2024 charges were primarily related to the acquisition of Morphic Holding,Inc.Asset impairment,restructuring and other special charges of$364.9 million in Q3 2025 were primarily related to a litigation charge,as well as acquisition and integration costs associated with the closing of our acquisition of Verve Therapeutics,Inc.In Q3 2024,there was a charge of$81.6 million,that primarily related to impairment of an intangible asset associated with a molecule in development.The effective tax rate was 22.8%in Q3 2025 compared with 38.9%in Q3 2024.The effective tax rates for Q3 2025 and Q3 2024 were both unfavorably impacted by non-deductible acquired IPR&D charges,with a larger impact occurring in Q3 2024.Additionally,the effective tax rate for Q3 2025 was unfavorably impacted by U.S.tax law changes enacted during the quarter.In Q3 2025,net income and earnings per share(EPS)were$5.58 billion and$6.21,respectively,compared with net income of$970.3 million and EPS of$1.07 in Q3 2024.EPS in Q3 2025 and Q3 2024 included acquired IPR&D charges of$0.71 and$3.08,respectively.Third-Quarter Non-GAAP MeasuresOn a non-GAAP basis,Q3 2025 gross margin increased 56%to$14.71 billion.Gross margin as a percent of revenue was 83.6%,an increase of 1.4 percentage points.The increase in gross margin percent was primarily driven by favorable product mix,partially offset by lower realized prices.3The non-GAAP effective tax rate was 17.7%in Q3 2025 compared with 37.6%in Q3 2024.The effective tax rates for Q3 2025 and Q3 2024 were both unfavorably impacted by non-deductible acquired IPR&D charges,with a larger impact occurring in Q3 2024.On a non-GAAP basis,Q3 2025 net income and EPS were$6.31 billion and$7.02,respectively,compared with net income of$1.06 billion and EPS of$1.18 in Q3 2024.Non-GAAP EPS in Q3 2025 and Q3 2024 included acquired IPR&D charges of$0.71 and$3.08,respectively.For further detail on non-GAAP measures,see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information(Unaudited)table later in this press release.Third-Quarter20252024%ChangeEarnings per share(reported)$6.21$1.07 NMAmortization of intangible assets.11 .12 Asset impairment,restructuring and other special charges.36 .07 Net losses(gains)on investments in equity securities(.04)(.09)U.S.Tax Law Change .39 Earnings per share(non-GAAP)$7.02$1.18 NMAcquired IPR&D.71 3.08(77)%Numbers may not add due to rounding4Selected Revenue Highlights(Dollars in millions)Third-QuarterYear-to-DateSelected Products20252024%Change20252024%ChangeMounjaro$6,515.1$3,112.7 109%$15,555.8$8,010.0 94%Zepbound 3,588.1 1,257.8 185%9,281.3 3,018.4 NMVerzenio 1,470.2 1,369.3 7%4,118.3 3,751.5 10%Total Revenue 17,600.8 11,439.1 54E,887.0 31,509.9 46%NM not meaningfulMounjaroFor Q3 2025,worldwide Mounjaro revenue increased 109%to$6.52 billion.U.S.revenue was$3.55 billion,an increase of 49%,reflecting strong demand,partially offset by lower realized prices.Revenue outside the U.S.increased to$2.97 billion compared with$728.0 million in Q3 2024,primarily driven by volume growth.ZepboundFor Q3 2025,U.S.Zepbound revenue increased 184%to$3.57 billion,compared with$1.26 billion in Q3 2024,primarily driven by increased demand,partially offset by lower realized prices.VerzenioFor Q3 2025,worldwide Verzenio revenue increased 7%to$1.47 billion.U.S.revenue was$880.3 million,compared with$878.8 million in Q3 2024,reflecting an increase in volume which was offset by lower realized prices.Revenue outside the U.S.was$589.8 million,an increase of 20%,primarily driven by volume growth and,to a lesser extent,favorable impact on foreign exchange rates.5Lilly shared numerous updates recently on key regulatory,clinical,business development and other events,including:RegulatoryLillys Omvoh(mirikizumab-mrkz)approved by U.S.FDA as a single-injection maintenance regimen in adults with ulcerative colitis(announcement)Lillys Kisunla(donanemab)receives marketing authorization by European Commission for the treatment of early symptomatic Alzheimers disease(announcement)U.S.FDA approves Inluriyo(imlunestrant)for adults with ER ,HER2-,ESR1-mutated advanced or metastatic breast cancer(announcement)Lillys olomorasib receives U.S.FDAs Breakthrough Therapy designation for the treatment of certain newly diagnosed metastatic KRAS G12C-mutant lung cancers(announcement)ClinicalLillys Omvoh(mirikizumab-mrkz)demonstrated early and sustained improvement in bowel urgency outcomes for patients with ulcerative colitis(announcement)Lillys EBGLYSS(lebrikizumab-lbkz)delivered durable disease control when administered once every eight weeks in patients with moderate-to-severe atopic dermatitis(announcement)Lillys baricitinib delivered near-complete scalp hair regrowth at one year for adolescents with severe alopecia areata in Phase 3 BRAVE-AA-PEDS trial(announcement)Lillys Verzenio(abemaciclib)prolonged survival in HR ,HER2-,high-risk early breast cancer with two years of treatment(announcement)Lillys oral GLP-1,orforglipron,demonstrated superior glycemic control in two successful Phase 3 trials,reconfirming its potential as a foundational treatment in type 2 diabetes(announcement)Lillys Omvoh(mirikizumab-mrkz)is the first and only IL-23p19 antagonist to show four years of sustained,corticosteroid-free comprehensive patient outcomes in ulcerative colitis(announcement)Lillys Mounjaro(tirzepatide),a GIP/GLP-1 dual receptor agonist,reduced A1C by an average of 2.2%in a Phase 3 trial of children and adolescents with type 2 diabetes(announcement)Lillys oral GLP-1,orforglipron,superior to oral semaglutide in head-to-head trial(announcement)Lillys oral GLP-1,orforglipron,demonstrated meaningful weight loss and cardiometabolic improvements in complete ATTAIN-1 results published in The New England Journal of Medicine(announcement)Lillys Jaypirca(pirtobrutinib),the first and only approved non-covalent(reversible)BTK inhibitor,significantly improved progression-free survival in patients with treatment-nave CLL/SLL(announcement)Lillys Verzenio(abemaciclib)increases overall survival in HR ,HER2-,high-risk early breast cancer with two years of therapy(announcement)Lillys oral GLP-1,orforglipron,is successful in third Phase 3 trial,triggering global regulatory submissions this year for the treatment of obesity(announcement)6OtherLilly announces more than$1.2 billion investment in Puerto Rico facility to boost oral medicine manufacturing capacity in the United States(announcement)LillyDirect and Walmart Pharmacy launch first retail pick-up option with direct-to-consumer pricing for Zepbound(announcement)Lilly partners with NVIDIA to build the industrys most powerful AI supercomputer,supercharging medicine discovery and delivery for patients(announcement)Lilly announces roster of Team USA athletes for the Olympic and Paralympic Games Milano Cortina 2026,pledges to translate U.S.Olympic and Paralympic milestones into meaningful community impact(announcement)Lilly to Acquire Adverum Biotechnologies(announcement)Lilly opens newest Gateway Labs site in San Diego to boost local biotechnology ecosystem(announcement)Lilly plans to build a new$6.5 billion facility to manufacture active pharmaceutical ingredients in Texas(announcement)Lilly announces plans to build$5 billion manufacturing facility in Virginia(announcement)Lilly launches TuneLab platform to give biotechnology companies access to AI-enabled drug discovery models built through over$1 billion in research investment(announcement)Anne White to Retire as Executive Vice President and President,Lilly Neuroscience(announcement)For information on important public announcements,visit the news section of Lillys website.72025 Financial GuidanceThe company has increased full-year revenue guidance to be in the range of$63.0 billion to$63.5 billion,primarily driven by strong underlying business performance across the portfolio and foreign exchange rates.The performance margin2 is now expected to be in the range of 43.5%and 44.5%on a reported basis and 45.0%and 46.0%on a non-GAAP basis.Both ratios reflect the increase in revenue guidance.Other income(expense)on a reported basis is now expected to be expense in the range of$700 million to$600 million due to a decrease in net losses on investments in equity securities and is still expected to be expense in the range of$700 million to$600 million on a non-GAAP basis.The 2025 estimated effective tax rate on a reported basis and a non-GAAP basis remain unchanged at approximately 19%and 17%,respectively.Based on these changes,EPS guidance has been increased to be in the range of$21.80 to$22.50 on a reported basis and$23.00 to$23.70 on a non-GAAP basis.The companys updated 2025 financial guidance reflects adjustments shown in the reconciliation table below.2025GuidanceEarnings per share(reported)$21.80 to$22.50U.S.tax legislation.39Amortization of intangible assets.43Asset impairment,restructuring,and other special charges.39Net losses on investments in equity securitiesEarnings per share(non-GAAP)$23.00 to$23.70Numbers may not add due to rounding82 The Company defines performance margin as gross margin less R&D,Marketing,Selling,and Administrative and Asset Impairment,Restructuring and Other Charges divided by Revenue.The following table summarizes the companys updated 2025 financial guidance:PriorUpdated(1)(2)(3)Revenue$60.0 to$62.0 billion$63.0 to$63.5 billionPerformance Margin(4)(reported)42.0%to 43.5C.5%to 44.5%(non-GAAP)43.0%to 44.5E.0%to 46.0%Other Income/(Expense)(reported)($750)to($650)million($700)to($600)millionOther Income/(Expense)(non-GAAP)($700)to($600)million UnchangedTax Rate(reported)Approx.19%UnchangedTax Rate(non-GAAP)Approx.17%UnchangedEarnings per Share(reported)$20.85 to$22.10$21.80 to$22.50Earnings per Share(non-GAAP)$21.75 to$23.00$23.00 to$23.70(1)Non-GAAP guidance reflects adjustments presented in the earnings per share reconciliation table above.(2)Guidance includes acquired IPR&D charges through Q3 2025 of$2.38 billion or$2.57 on a per share basis.Guidance does not include acquired IPR&D either incurred,or expected to be incurred,after Q3 2025.(3)This guidance is based on the existing tariff and trade environment as of October 30,2025,and does not reflect any policy shifts,including pharmaceutical sector tariffs,that could impact business.(4)The Company defines performance margin as gross margin less R&D,Marketing,Selling,and Administrative,and Asset Impairment,Restructuring and Other Charges divided by Revenue.9Webcast of Conference CallAs previously announced,investors and the general public can access a live webcast of the Q3 2025 financial results conference call through a link on Lillys website at conference call will begin at 10 a.m.Eastern time today and will be available for replay via the website.Non-GAAP Financial MeasuresCertain financial information is presented on both a reported and a non-GAAP basis.Some numbers in this press release may not add due to rounding.Reported results were prepared in accordance with U.S.generally accepted accounting principles(GAAP)and include all revenue and expenses recognized during the periods.Non-GAAP measures reflect adjustments for the items described in the reconciliation tables later in the release.Related materials provide certain GAAP and non-GAAP figures excluding the impact of foreign exchange rates.Lilly recalculates current period figures on a constant currency basis by keeping constant the exchange rates from the base period.The companys 2025 financial guidance is provided on both a reported and a non-GAAP basis.The non-GAAP measures are presented to provide additional insights into the underlying trends in the companys business.About LillyLilly is a medicine company turning science into healing to make life better for people around the world.Weve been pioneering life-changing discoveries for nearly 150 years,and today our medicines help tens of millions of people across the globe.Harnessing the power of biotechnology,chemistry and genetic medicine,our scientists are urgently advancing new discoveries to solve some of the worlds most significant health challenges:redefining diabetes care;treating obesity and curtailing its most devastating long-term effects;advancing the fight against Alzheimers disease;providing solutions to some of the most debilitating immune system disorders;and transforming the most difficult-to-treat cancers into manageable diseases.With each step toward a healthier world,were motivated by one thing:making life better for millions more people.That includes delivering innovative clinical trials that reflect the diversity of our world and working to ensure our medicines are accessible and affordable.To learn more,visit L and L Statement Regarding Forward-Looking StatementsThis press release and the related attachments contain managements intentions and expectations for the future,all of which are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.The words estimate,project,intend,expect,believe,target,plan,anticipate,may,could,aim,seek,will,continue,and similar expressions are intended to identify forward-looking statements.Actual results may differ materially due to various factors.The following include some but not all of the factors that could cause actual results or events to differ from those anticipated,including the significant costs and uncertainties in the pharmaceutical research and development process,including with respect to the timing and process of obtaining regulatory approvals;the impact and uncertain outcome of acquisitions and business development transactions and related costs;intense competition affecting the companys products,pipeline,or industry;market uptake of launched products and indications;continued pricing pressures and the impact of actions of governmental and private actors affecting pricing of,reimbursement for,and patient access to pharmaceuticals,or reporting obligations related thereto;safety or efficacy concerns associated with the companys or competitive products;dependence on relatively few products or product classes for a significant percentage of the companys total revenue and a consolidated supply chain;the expiration of intellectual property protection for certain of the companys products and competition from generic and biosimilar products;the companys ability to protect and enforce patents and other intellectual property and changes in patent law or regulations related to data package exclusivity;information technology system inadequacies,inadequate controls or procedures,security breaches,or operating failures;unauthorized access,disclosure,misappropriation,or compromise of confidential information or other data stored in the companys information technology systems,networks,and facilities,or those of third parties with whom the company shares its data and violations of data protection laws or regulations;issues with product supply and regulatory approvals stemming from manufacturing difficulties,disruptions,or shortages,including as a result of unpredictability and variability in demand,labor shortages,third-party performance,quality,cyber-attacks,or regulatory actions related to the companys and third-party facilities;reliance on third-party relationships and outsourcing arrangements;the use of artificial intelligence or other emerging technologies in various facets of the companys operations,which may exacerbate competitive,regulatory,litigation,cybersecurity,and other risks;the impact of global macroeconomic conditions,including uneven economic growth or downturns or uncertainty,trade and other global disputes and interruptions,including related to tariffs,trade protection measures,and similar restrictions,international tension,conflicts,regional dependencies,or other costs,uncertainties,and risks related to engaging in business globally;fluctuations in foreign currency exchange rates,changes in interest rates and inflation or deflation;significant and sudden declines or volatility in the trading price of the companys common stock and market capitalization;litigation,investigations,or other similar proceedings involving past,current,or future products or activities;changes in tax law and regulations,tax rates,or events that differ from our assumptions related to tax positions;regulatory changes,developments,and uncertainty;regulatory oversight and actions regarding the companys operations and products;regulatory compliance problems or government investigations;risks from the proliferation of counterfeit,misbranded,adulterated or illegally compounded products;actual or perceived deviation from environmental-,social-,or governance-related requirements or expectations;asset impairments and restructuring charges;and changes in accounting and reporting standards.For additional information about the factors that could cause actual results or events to differ materially from forward-looking statements,please see the companys latest Form 10-K and subsequent Forms 8-K and 10-Q filed with the Securities and Exchange Commission.You should not place undue reliance on forward-looking statements contained in this press release and the related attachments,which,except as otherwise noted,speak only as of the date of this release.Except as is required by law,the company expressly disclaims any obligation to publicly release any revisions to forward-looking statements contained in this press release and the related attachments to reflect events or circumstances after the date of this release.#Website InformationThe information contained on,or that may be accessed through,our website or any third-party website is not incorporated by reference into,and is not a part of,this earnings release.Trademarks and Trade NamesAll trademarks or trade names referred to in this press release are the property of the company,or,to the extent trademarks or trade names belonging to other companies are references in this press release,the property of their respective owners.Solely for convenience,the trademarks and trade names in this press release are referred to without the and symbols,but such references should not be construed as any indicator that the company or,to the extent applicable,their respective owners will not assert,to the fullest extent under applicable law,the companys or their rights thereto.We do not intend the use or display of other companies trademarks and trade names to imply a relationship with,or endorsement or sponsorship of us by,any other companies11Eli Lilly and CompanyOperating Results(Unaudited)REPORTED(Dollars in millions,except per share data and numbers may not add due to rounding)Three Months EndedNine Months EndedSeptember 30,September 30,20252024%Chg.20252024%Chg.Revenue$17,600.8$11,439.1 54%$45,887.0$31,509.9 46%Cost of sales 3,008.3 2,170.8 39%7,680.3 6,014.5 28%Research and development 3,465.7 2,734.1 27%9,535.5 7,968.1 20%Marketing,selling and administrative 2,740.7 2,099.8 31%7,962.6 6,169.3 29quired IPR&D 655.7 2,826.4(77)%2,381.2 3,091.2(23)%Asset impairment,restructuring and other special charges 364.9 81.6 NM 399.9 516.6(23)%Operating income 7,365.4 1,526.4 NM 17,927.5 7,750.2 131%Net interest income(expense)(114.7)(144.9)(519.1)(425.0)Net other income(expense)(18.4)206.9 56.4 316.5 Other income(expense)(133.1)62.0 NM(462.7)(108.5)NMIncome before income taxes 7,232.3 1,588.4 NM 17,464.8 7,641.7 129%Income tax expense 1,649.9 618.1 167%3,462.5 1,461.5 137%Net income$5,582.5$970.3 NM$14,002.3$6,180.2 127rnings per share-diluted$6.21$1.07 NM$15.56$6.83 128%Dividends paid per share$1.50$1.30 15%$4.50$3.90 15%Weighted-average shares outstanding(thousands)-diluted 898,804 905,027 899,734 904,359 NM not meaningful12Eli Lilly and CompanyReconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information(Unaudited)(Dollars in millions,except per share data and numbers may not add due to rounding)Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Gross Margin-As Reported$14,592.5$9,268.3$38,206.7$25,495.4 Increase for excluded items:Amortization of intangible assets(Cost of sales)(1)119.2 139.4 364.0 417.6 Gross Margin-Non-GAAP$14,711.7$9,407.7$38,570.7$25,913.0 Gross Margin as a percent of revenue-As Reported 82.9.0.3.9%Gross Margin as a percent of revenue-Non-GAAP(2)83.6.2.1.2%1.Excludes amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties.2.Non-GAAP gross margin as a percent of revenue reflects the gross margin effects of the adjustments presented above.13Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information(Unaudited)(Dollars in millions,except per share data and numbers may not add due to rounding)Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Net income-Reported$5,582.5$970.3$14,002.3$6,180.2 Increase(decrease)for excluded items:Amortization of intangible assets(Cost of sales)(1)119.2 139.4 364.0 417.6 Asset impairment,restructuring and other special charges(2)364.9 81.6 399.9 516.6 Net(gains)losses on investments in equity securities(Other income/expense)(48.0)(103.0)5.6 21.3 U.S.Tax Law Change(3)350.3 350.3 Corresponding tax effects(Income taxes)(56.9)(23.8)(126.5)(194.7)Net income-Non-GAAP$6,311.9$1,064.5$14,995.6$6,941.0 Effective tax rate-Reported 22.88.9.8.1fective tax rate-Non-GAAP(4)17.77.6.8.3rnings per share(diluted)-Reported$6.21$1.07$15.56$6.83 Earnings per share(diluted)-Non-GAAP$7.02$1.18$16.67$7.68 1.Excludes amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties.2.For the three and nine months ended September 30,2025,excludes litigation charges,as well as acquisition and integration costs associated with the closing of our acquisition of Verve Therapeutics,Inc.For the nine months ended September 30,2024,excluded charges related to litigation and impairment of an intangible asset associated with a molecule in development.3.Relates to adjusting our income tax provision for prior periods and remeasuring our deferred tax assets and liabilities.4.Non-GAAP tax rate reflects the tax effects of the adjustments presented above.14
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-QQuarterly Report Pursuant to Section 13 or 15(d)of theSecurities Exchange Act of 1934For the quarterly period ended September 30,2025COMMISSION FILE NUMBER 001-6351ELI LILLY AND COMPANY(Exact name of Registrant as specified in its charter)Indiana 35-0470950(State or other jurisdiction of(I.R.S.Employerincorporation or organization)Identification No.)Lilly Corporate Center,Indianapolis,Indiana 46285(Address and zip code of principal executive offices)Registrants telephone number,including area code(317)276-2000Securities registered pursuant to Section 12(b)of the Exchange Act:Title of Each ClassTrading SymbolsName of Each Exchange On Which RegisteredCommon Stock(no par value)LLYNew York Stock Exchange1.625%Notes due 2026LLY26New York Stock Exchange2.125%Notes due 2030LLY30New York Stock Exchange0.625%Notes due 2031LLY31New York Stock Exchange0.500%Notes due 2033LLY33New York Stock Exchange6.77%Notes due 2036LLY36New York Stock Exchange1.625%Notes due 2043LLY43New York Stock Exchange1.700%Notes due 2049LLY49ANew York Stock Exchange1.125%Notes due 2051LLY51New York Stock Exchange1.375%Notes due 2061LLY61New York Stock ExchangeIndicate by check mark whether the Registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12months(or for such shorter period that the Registrant was required to file such reports)and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the Registrant was required to submit such files).Yes No Indicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growthcompany.See the definitions of large accelerated filer,accelerated filer,smaller reporting company,and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filerNon-accelerated filer Smaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The number of shares of common stock outstanding as of October 27,2025:Class Number of Shares OutstandingCommon 945,383,757 Eli Lilly and CompanyForm 10-QFor the Quarter Ended September 30,2025Table of ContentsPagePART I.Financial Information5Item 1.Financial Statements5Consolidated Condensed Statements of Operations5Consolidated Condensed Statements of Comprehensive Income6Consolidated Condensed Balance Sheets7Consolidated Condensed Statements of Shareholders Equity8Consolidated Condensed Statements of Cash Flows10Notes to Consolidated Condensed Financial Statements11Item 2.Managements Discussion and Analysis of Results of Operations and Financial Condition34Executive Overview34Results of Operations38Financial Condition and Liquidity41Critical Accounting Estimates42Available Information on our Website42Item 3.Quantitative and Qualitative Disclosures About Market Risk43Item 4.Controls and Procedures43PART II.Other Information44Item 1.Legal Proceedings44Item 1A.Risk Factors44Item 2.Unregistered Sales of Equity Securities and Use of Proceeds44Item 5.Other Information44Item 6.Exhibits45Signatures452Forward-Looking StatementsThis Quarterly Report on Form 10-Q and our other publicly available documents include forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934(Exchange Act),and are subject to thesafe harbor created thereby under the Private Securities Litigation Reform Act of 1995.Forward-looking statements include all statementsthat do not relate solely to historical or current facts,and generally can be identified by the use of words such as may,could,aim,seek,believe,will,expect,project,estimate,intend,target,anticipate,plan,continue,or similar expressions or future or conditionalverbs.Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ from those expressed inforward-looking statements.Forward-looking statements are based on managements current plans and expectations,expressed in goodfaith and believed to have a reasonable basis.However,we can give no assurance that any expectation or belief will result or will beachieved or accomplished.Investors therefore should not place undue reliance on forward-looking statements.The following include somebut not all of the factors that could cause actual results or events to differ from those anticipated:the significant costs and uncertainties in the pharmaceutical research and development process,including with respect to the timing andprocess of obtaining regulatory approvals;the impact and uncertain outcome of acquisitions and business development transactions and related costs;intense competition affecting our products,pipeline,or industry;market uptake of launched products and indications;continued pricing pressures and the impact of actions of governmental and private actors affecting pricing of,reimbursement for,andpatient access to pharmaceuticals,or reporting obligations related thereto;safety or efficacy concerns associated with our or competitive products;dependence on relatively few products or product classes for a significant percentage of our total revenue and a consolidated supplychain;the expiration of intellectual property protection for certain of our products and competition from generic and biosimilar products;our ability to protect and enforce patents and other intellectual property and changes in patent law or regulations related to data packageexclusivity;information technology system inadequacies,inadequate controls or procedures,security breaches,or operating failures;unauthorized access,disclosure,misappropriation,or compromise of confidential information or other data stored in our informationtechnology systems,networks,and facilities,or those of third parties with whom we share our data and violations of data protection lawsor regulations;issues with product supply and regulatory approvals stemming from manufacturing difficulties,disruptions,or shortages,including as aresult of unpredictability and variability in demand,labor shortages,third-party performance,quality,cyber-attacks,or regulatory actionsrelated to our and third-party facilities;reliance on third-party relationships and outsourcing arrangements;the use of artificial intelligence or other emerging technologies in various facets of our operations,which may exacerbate competitive,regulatory,litigation,cybersecurity,and other risks;the impact of global macroeconomic conditions,including uneven economic growth or downturns or uncertainty,trade and other globaldisputes and interruptions,including related to tariffs,trade protection measures,and similar restrictions,international tension,conflicts,regional dependencies,or other costs,uncertainties,and risks related to engaging in business globally;fluctuations in foreign currency exchange rates,changes in interest rates,and inflation or deflation;significant and sudden declines or volatility in the trading price of our common stock and market capitalization;litigation,investigations,or other similar proceedings involving past,current,or future products or activities;changes in tax law and regulation,tax rates,or events that differ from our assumptions related to tax positions;regulatory changes,developments,and uncertainty;regulatory oversight and actions regarding our operations and products;regulatory compliance problems or government investigations;risks from the proliferation of counterfeit,misbranded,adulterated,or illegally compounded products;3actual or perceived deviation from environmental-,social-,or governance-related requirements or expectations;asset impairments and restructuring charges;andchanges in accounting and reporting standards.More information on factors that could cause our actual results to differ from those expressed in forward-looking statements is included fromtime to time in our reports filed with the Securities and Exchange Commission,including in our Annual Report on Form 10-K for the year endedDecember 31,2024,particularly under Part I,Item 1A,Risk Factors.Investors should understand that it is not possible to predict or identifyall such factors and should not consider the risks described above and under Part I,Item 1A,Risk Factors of our Annual Report on Form 10-K to be a complete statement of all potential risks and uncertainties.All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are expressly qualified in their entirety bythe cautionary statements included in or incorporated by reference into this Quarterly Report on Form 10-Q.Except as is required by law,weexpressly disclaim any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of thisQuarterly Report on Form 10-Q.Trademarks and Trade NamesAll trademarks or trade names referred to in this Quarterly Report on Form 10-Q are the property of the company,or,to the extenttrademarks or trade names belonging to other companies are referenced in this Quarterly Report on Form 10-Q,the property of theirrespective owners.Solely for convenience,the trademarks and trade names in this Quarterly Report on Form 10-Q are referred to withoutthe and symbols,but such references should not be construed as any indicator that the company or,to the extent applicable,theirrespective owners will not assert,to the fullest extent under applicable law,the companys or their rights thereto.We do not intend the use ordisplay of other companies trademarks and trade names to imply a relationship with,or endorsement or sponsorship of us by,any othercompanies.4PART I.Financial InformationItem 1.Financial StatementsConsolidated Condensed Statements of Operations(Unaudited)ELI LILLY AND COMPANY(Dollars and shares in millions,except per-share data)Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Revenue(Note 2)$17,600.8$11,439.1$45,887.0$31,509.9 Costs,expenses,and other:Cost of sales3,008.3 2,170.8 7,680.3 6,014.5 Research and development3,465.7 2,734.1 9,535.5 7,968.1 Marketing,selling,and administrative2,740.7 2,099.8 7,962.6 6,169.3 Acquired in-process research and development(Note 3)655.7 2,826.4 2,381.2 3,091.2 Asset impairment,restructuring,and other special charges(Note 5)364.9 81.6 399.9 516.6 Othernet,(income)expense(Note 12)133.1(62.0)462.7 108.5 10,368.4 9,850.7 28,422.2 23,868.2 Income before income taxes7,232.4 1,588.4 17,464.8 7,641.7 Income taxes(Note 8)1,649.9 618.1 3,462.5 1,461.5 Net income$5,582.5$970.3$14,002.3$6,180.2 Earnings per share:Basic$6.22$1.08$15.60$6.86 Diluted$6.21$1.07$15.56$6.83 Shares used in calculation of earnings per share:Basic896.9901.0897.8900.9Diluted898.8905.0899.7904.4See notes to consolidated condensed financial statements.5Consolidated Condensed Statements of Comprehensive Income(Unaudited)ELI LILLY AND COMPANY(Dollars in millions)Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Net income$5,582.5$970.3$14,002.3$6,180.2 Other comprehensive income,net of tax(Note 11)509.7 103.7 1,115.6 52.2 Comprehensive income$6,092.2$1,074.0$15,117.9$6,232.4 See notes to consolidated condensed financial statements.6Consolidated Condensed Balance SheetsELI LILLY AND COMPANY(Dollars in millions)September 30,2025December 31,2024Assets(Unaudited)Current AssetsCash and cash equivalents(Note 7)$9,791.9$3,268.4 Short-term investments(Note 7)121.6 154.8 Accounts receivable,net of allowances of$21.7(2025)and$14.9(2024)16,107.4 11,005.7 Other receivables3,349.8 2,269.7 Inventories(Note 6)12,180.4 7,589.2 Prepaid expenses(Note 8)20,248.7 8,340.5 Other current assets271.5 111.4 Total current assets62,071.3 32,739.7 Investments(Note 7)2,808.3 3,215.9 Goodwill5,898.0 5,770.3 Other intangibles,net6,446.7 6,166.3 Deferred tax assets8,962.7 8,000.6 Property and equipment,net of accumulated depreciation of$12,410.9(2025)and$11,789.0(2024)22,316.0 17,102.4 Other noncurrent assets6,432.4 5,719.7 Total assets$114,935.4$78,714.9 Liabilities and EquityCurrent LiabilitiesShort-term borrowings and current maturities of long-term debt$1,633.0$5,117.1 Accounts payable4,262.2 3,228.6 Employee compensation1,965.7 2,093.9 Sales rebates and discounts17,620.2 11,539.3 Short-term income taxes payable9,444.4 1,116.4 Other current liabilities5,215.4 5,281.3 Total current liabilities40,140.9 28,376.6 Noncurrent LiabilitiesLong-term debt40,873.6 28,527.1 Long-term income taxes payable6,293.6 4,060.9 Other noncurrent liabilities3,776.5 3,478.7 Total noncurrent liabilities50,943.7 36,066.7 Commitments and Contingencies(Note 10)Eli Lilly and Company Shareholders EquityCommon stock591.4 592.4 Additional paid-in capital7,231.9 7,439.3 Retained earnings22,252.0 13,545.0 Employee benefit trust(3,013.2)(3,013.2)Accumulated other comprehensive loss(Note 11)(3,206.3)(4,321.9)Cost of common stock in treasury(62.5)(49.5)Total Eli Lilly and Company shareholders equity23,793.3 14,192.1 Noncontrolling interests57.5 79.5 Total equity23,850.8 14,271.6 Total liabilities and equity$114,935.4$78,714.9 See notes to consolidated condensed financial statements.7Consolidated Condensed Statements of Shareholders Equity(Unaudited)ELI LILLY AND COMPANYEquity of Eli Lilly and Company Shareholders(Dollars in millions,except per-share data,andshares in thousands)Common StockAdditionalPaid-inCapitalRetainedEarningsEmployeeBenefit TrustAccumulated OtherComprehensiveLossCommon Stock in TreasuryNoncontrollingInterestsSharesAmountSharesAmountBalance at July 1,2024950,781$594.2$7,214.2$13,178.0$(3,013.2)$(4,378.5)365$(32.7)$73.5 Net income970.3 11.8 Other comprehensive income,net of tax103.7 Retirement of treasury shares(582)(0.3)(520.8)(582)521.1 Purchase of treasury shares582(521.1)Issuance of stock under employee stock plans,net16 (7.8)Stock-based compensation133.2 Other(0.3)(4.6)Balance at September 30,2024950,215$593.9$7,339.6$13,627.2$(3,013.2)$(4,274.8)365$(32.7)$80.7 Balance at July 1,2025947,198$592.0$7,089.3$17,376.2$(3,013.2)$(3,716.0)365$(55.4)$76.2 Net income5,582.5 3.0 Other comprehensive income,net of tax509.7 Retirement of treasury shares(1,011)(0.6)(707.5)(1,011)708.1 Purchase of treasury shares1,011(708.1)Issuance of stock under employee stock plans,net19 (8.5)Stock-based compensation151.1 Other0.8(7.1)(21.7)Balance at September 30,2025946,206$591.4$7,231.9$22,252.0$(3,013.2)$(3,206.3)365$(62.5)$57.5 As of September 30,2025,there was$12.40 billion remaining under our$15.00 billion share repurchase program authorized in December 2024.See notes to consolidated condensed financial statements.(1)(1)8Equity of Eli Lilly and Company Shareholders(Dollars in millions,except per-share data,andshares in thousands)Common StockAdditional Paid-in CapitalRetained EarningsEmployeeBenefit TrustAccumulated OtherComprehensiveLossCommon Stock in TreasuryNoncontrollingInterestsSharesAmountSharesAmountBalance at January 1,2024949,781$593.6$7,250.4$10,312.3$(3,013.2)$(4,327.0)402$(44.2)$91.8 Net income(loss)6,180.2(3.2)Other comprehensive income,net of tax52.2 Cash dividends declared per share:$2.60(2,342.9)Retirement of treasury shares(582)(0.3)(520.8)(582)521.1 Purchase of treasury shares582(521.1)Issuance of stock under employee stock plans,net1,016 0.6(414.5)(37)11.5 Stock-based compensation503.7 Other(1.6)(7.9)Balance at September 30,2024950,215$593.9$7,339.6$13,627.2$(3,013.2)$(4,274.8)365$(32.7)$80.7 Balance at January 1,2025947,903$592.4$7,439.3$13,545.0$(3,013.2)$(4,321.9)365$(49.5)$79.5 Net income14,002.3 28.7 Other comprehensive income,net of tax1,115.6 Cash dividends declared per share:$3.00(2,692.2)Retirement of treasury shares(3,279)(2.0)(2,598.3)(3,279)2,600.3 Purchase of treasury shares3,279(2,600.3)Issuance of stock under employee stock plans,net1,582 1.0(697.3)Stock-based compensation489.9 Other(4.8)(13.0)(50.7)Balance at September 30,2025946,206$591.4$7,231.9$22,252.0$(3,013.2)$(3,206.3)365$(62.5)$57.5 As of September 30,2025,there was$12.40 billion remaining under our$15.00 billion share repurchase program authorized in December 2024.See notes to consolidated condensed financial statements.(1)(1)9Consolidated Condensed Statements of Cash Flows(Unaudited)ELI LILLY AND COMPANY(Dollars in millions)Nine Months Ended September 30,20252024Cash Flows from Operating ActivitiesNet income$14,002.3$6,180.2 Adjustments to Reconcile Net Income to Cash Flows from Operating Activities:Depreciation and amortization1,411.3 1,281.8 Change in deferred income taxes(958.9)(1,716.4)Stock-based compensation expense489.9 503.7 Acquired in-process research and development2,381.2 3,091.2 Other changes in operating assets and liabilities,net of acquisitions(4,418.9)(3,160.1)Other operating activities,net681.5 163.7 Net Cash Provided by Operating Activities13,588.4 6,344.1 Cash Flows from Investing ActivitiesPurchases of property and equipment(5,294.3)(3,561.8)Proceeds from sales of and distributions from noncurrent investments832.0 318.0 Purchases of noncurrent investments(518.0)(525.1)Cash paid for acquisitions,net of cash acquired(549.4)(947.7)Purchases of in-process research and development(2,584.3)(3,094.6)Other investing activities,net(55.8)430.2 Net Cash Used for Investing Activities(8,169.8)(7,381.0)Cash Flows from Financing ActivitiesDividends paid(4,038.5)(3,512.1)Net change in short-term borrowings(4,337.6)(4,894.1)Proceeds from issuance of long-term debt13,167.2 11,417.1 Repayments of long-term debt(778.1)(664.2)Purchases of common stock(2,600.3)(446.1)Other financing activities,net(746.9)(445.1)Net Cash Provided by Financing Activities665.8 1,455.5 Effect of exchange rate changes on cash and cash equivalents439.1 131.8 Net increase in cash and cash equivalents6,523.5 550.4 Cash and cash equivalents at January 13,268.4 2,818.6 Cash and Cash Equivalents at September 30$9,791.9$3,369.0 See notes to consolidated condensed financial statements.10Notes to Consolidated Condensed Financial Statements(Tables present dollars in millions,except per-share data,and numbers may not add due to rounding)Note 1:Basis of Presentation and Implementation of New Financial Accounting StandardsWe have prepared the accompanying unaudited consolidated condensed financial statements in accordance with the requirements of Form10-Q and,therefore,they do not include all information and footnotes necessary for a fair presentation of financial position,results ofoperations,and cash flows in conformity with accounting principles generally accepted in the United States(GAAP).In our opinion,theconsolidated condensed financial statements reflect all adjustments(including those that are normal and recurring)that are necessary for afair presentation of the results of operations for the periods shown.In preparing financial statements in conformity with GAAP,we must makeestimates and assumptions that affect the reported amounts of assets,liabilities,revenue,expenses,and related disclosures at the date ofthe financial statements and during the reporting period.Actual results could differ from those estimates.The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements andaccompanying notes included in our Annual Report on Form 10-K for the year ended December 31,2024.We issued our financialstatements by filing them with the Securities and Exchange Commission and have evaluated subsequent events up to the time of the filing ofthis Quarterly Report on Form 10-Q.All per-share amounts,unless otherwise noted in the footnotes,are presented on a diluted basis;that is,based on the weighted-averagenumber of common shares outstanding plus the effect of incremental shares from our stock-based compensation programs,if dilutive.We operate as a single operating segment engaged in the discovery,development,manufacturing,marketing,and sales of pharmaceuticalproducts worldwide.A global research and development organization and a supply chain organization are responsible for the discovery,development,manufacturing,and supply of our products.Our commercial organizations market,distribute,and sell the products.Thebusiness is also supported by global corporate staff functions.See Note 13 for additional information.Implementation of New Financial Accounting StandardsAccounting Standards Update(ASU)2023-09,Income Taxes(Topic 740):Improvements to Income Tax Disclosures,establishes incrementaldisaggregation of income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid.This standard is effectivefor fiscal years beginning after December 15,2024,and requires prospective application with the option to apply it retrospectively.We intendto adopt this standard in our Annual Report on Form 10-K for the year ending December 31,2025.We are currently evaluating the potentialimpact of adopting this standard on our disclosures.ASU 2024-03,Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures(Subtopic 220-40):Disaggregation of Income Statement Expenses,requires disaggregation of specific expense categories in the notes to the financialstatements and a qualitative description of the remaining expense amounts not separately disaggregated.This standard is effective forannual reporting periods beginning after December 15,2026,and requires prospective application with the option to apply it retrospectively.We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31,2027.We are currently evaluating thepotential impact of adopting this standard on our disclosures.11Note 2:RevenueThe following table summarizes our revenue recognized in our consolidated condensed statements of operations:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Net product revenue$16,330.5$10,571.6$42,657.7$28,723.0 Collaboration and other revenue1,270.3 867.5 3,229.3 2,786.9 Revenue$17,600.8$11,439.1$45,887.0$31,509.9 We recognize revenue primarily from two different types of contracts,product sales to customers(net product revenue)and collaborationsand other arrangements.Revenue recognized from collaborations and other arrangements includes our share of profits from thecollaborations,as well as royalties,upfront,and milestone payments we receive under these types of contracts.See Note 4 for additionalinformation related to our collaborations and other arrangements.Collaboration and other revenue disclosed above includes the revenueresulting from our collaboration with Boehringer Ingelheim discussed in Note 4,as well as the sale of product rights.Substantially all of theremainder of collaboration and other revenue is related to contracts accounted for as contracts with customers.Adjustments to RevenueAdjustments 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 less than 1 percent of U.S.revenue during the three and ninemonths ended September 30,2025,and 6 percent and 4 percent of U.S.revenue during the three and nine months ended September 30,2024,respectively.12Disaggregation of RevenueThe following table summarizes revenue,including net product revenue and collaboration and other revenue,by product for the three monthsended September 30,2025 and 2024:Three Months Ended September 30,20252024U.S.Outside U.S.TotalU.S.Outside U.S.TotalCardiometabolic Health:Mounjaro$3,550.1$2,965.0$6,515.1$2,384.7$728.0$3,112.7 Zepbound3,568.3 19.8 3,588.1 1,257.8 1,257.8 Trulicity706.9 345.0 1,051.8 935.3 366.0 1,301.4 Jardiance424.2 534.8 959.0 335.9 350.5 686.4 Other cardiometabolic health617.7 446.1 1,063.9 603.3 445.5 1,048.7 Total cardiometabolic health8,867.2 4,310.7 13,177.9 5,517.0 1,890.0 7,407.0 Oncology:Verzenio880.3 589.8 1,470.2 878.8 490.4 1,369.3 Other oncology494.7 442.8 937.4 415.5 447.1 862.5 Total oncology1,375.0 1,032.6 2,407.6 1,294.3 937.5 2,231.8 Immunology:Taltz583.4 318.1 901.5 600.3 279.3 879.6 Other immunology190.0 270.9 460.9 93.8 212.3 306.1 Total immunology773.4 589.0 1,362.4 694.1 491.6 1,185.7 Neuroscience239.6 76.1 315.7 201.3 150.5 351.8 Other44.8 292.4 337.2 107.0 155.8 262.8 Revenue$11,300.0$6,300.8$17,600.8$7,813.6$3,625.5$11,439.1 Jardiance revenue includes Glyxambi,Synjardy,and Trijardy XR.(1)(1)13The following table summarizes revenue,including net product revenue and collaboration and other revenue,by product for the nine monthsended September 30,2025 and 2024:Nine Months Ended September 30,20252024U.S.Outside U.S.TotalU.S.Outside U.S.TotalCardiometabolic Health:Mounjaro$9,507.8$6,048.0$15,555.8$6,318.7$1,691.3$8,010.0 Zepbound9,253.6 27.7 9,281.3 3,018.4 3,018.4 Trulicity2,221.2 1,018.0 3,239.2 2,894.0 1,109.3 4,003.3 Jardiance1,116.2 1,547.2 2,663.4 1,133.1 1,009.4 2,142.5 Other cardiometabolic health1,708.5 1,280.6 2,989.2 1,958.8 1,281.6 3,240.4 Total cardiometabolic health23,807.3 9,921.5 33,728.9 15,323.0 5,091.6 20,414.6 Oncology:Verzenio2,467.0 1,651.4 4,118.3 2,378.4 1,373.1 3,751.5 Other oncology1,373.1 1,277.2 2,650.4 1,189.5 1,259.5 2,449.0 Total oncology3,840.1 2,928.6 6,768.7 3,567.9 2,632.6 6,200.5 Immunology:Taltz1,608.7 902.2 2,511.0 1,486.7 821.7 2,308.4 Other immunology443.7 751.4 1,195.0 204.3 589.3 793.6 Total immunology2,052.4 1,653.6 3,706.0 1,691.0 1,411.0 3,102.0 Neuroscience676.8 255.0 931.8 556.4 524.0 1,080.4 Other227.0 524.6 751.6 205.0 507.4 712.4 Revenue$30,603.6$15,283.4$45,887.0$21,343.2$10,166.7$31,509.9 Jardiance revenue includes Glyxambi,Synjardy,and Trijardy XR.The following table summarizes revenue by geographical area:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Revenue:U.S.$11,300.0$7,813.6$30,603.6$21,343.2 Europe3,498.1 1,628.3 8,461.2 4,472.7 Japan554.7 429.1 1,477.8 1,255.7 China560.4 459.9 1,477.2 1,231.2 Rest of world1,687.7 1,108.2 3,867.2 3,207.1 Revenue$17,600.8$11,439.1$45,887.0$31,509.9 Revenue is attributed to the countries based on the location of the customer or other party.(1)(1)(1)(1)14Note 3:AcquisitionsWe engage in various forms of business development activities to enhance or refine our product pipeline,including acquisitions,collaborations,investments,and licensing arrangements.In connection with these arrangements,our partners may be entitled to futureroyalties and/or commercial milestones based on sales if the products are approved for commercialization and/or milestones based on thesuccessful progress of compounds through the development process.We account for each arrangement as either a business combination oran asset acquisition in accordance with GAAP.Business CombinationsWhen an acquisition met the definition of a business under GAAP,the assets acquired and liabilities assumed were recorded at theirrespective fair values as of the acquisition date in our consolidated condensed financial statements.The determination of estimated fair valuerequired management to make significant estimates and assumptions.The excess of the purchase price over the fair value of the acquirednet assets was recorded as goodwill.The results of operations of the acquisition are included in our consolidated condensed financialstatements from the date of acquisition.Verve AcquisitionOverview of TransactionIn July 2025,we acquired all shares of Verve Therapeutics,Inc.(Verve)for a purchase price of$10.50 per share in cash(or an aggregate ofapproximately$549.4 million,net of cash acquired),plus one non-tradeable contingent value right(CVR)per share that entitles the holder toreceive up to an additional$3.00 per share(or an aggregate of up to approximately$300 million)payable,subject to certain terms andconditions,upon the achievement of a certain specified milestone.Verve is developing genetic medicines for cardiovascular disease,including VERVE-102,a gene editing medicine targeting PCSK9,a gene linked to cholesterol levels and cardiovascular health.VERVE-102is being evaluated in a Phase 1b clinical trial study and has been granted Fast Track designation by the U.S.Food and Drug Administration.Assets Acquired and Liabilities AssumedOur access to information was limited prior to this acquisition.As a consequence,we are in the process of determining fair values and taxbases of the assets acquired and liabilities assumed,including the identification and valuation of intangible assets and tax exposures.Thefinal determination of these amounts will be completed as soon as possible but no later than one year from the acquisition date.The finaldetermination may result in asset and liability fair values and tax bases that differ from the preliminary estimates and require changes to thepreliminary amounts recognized.The following table summarizes the preliminary amounts recognized for assets acquired and liabilities assumed as of the acquisition date:Estimated Fair Value at July 25,2025Cash$388.7 Acquired in-process research and development(IPR&D)608.0Goodwill127.3Other assets and liabilities,net38.9 Acquisition date fair value of consideration transferred1,162.9 Less:Cash acquired(388.7)Fair value of CVR liability(177.0)Fair value of equity interest in Verve held before the business combination(47.8)Cash paid,net of cash acquired$549.4 Acquired IPR&D intangibles primarily relate to VERVE-102.The goodwill recognized from this acquisition is primarily attributable to future unidentified projects and products and the assembled workforce for Verve,which is notdeductible for tax purposes.See Note 7 for a discussion on the estimation of the CVR liability.(1)(2)(3)(1)(2)(3)15The results of operations attributable to this acquisition for the three and nine months ended September 30,2025 were not material.Pro forma information has not been included as this acquisition did not have a material impact on our consolidated condensed statements ofoperations for the three and nine months ended September 30,2025.Manufacturing Facility AcquisitionOverview of TransactionIn May 2024,we acquired NexPharm Parent HoldCo,LLC and Isopro Holdings,LLC,which together own the assets of a manufacturing sitein Wisconsin,for a purchase price of$924.7 million,net of cash acquired.The facility expands our global parenteral(injectable)productmanufacturing network.Assets Acquired and Liabilities AssumedThe following table summarizes the amounts recognized for assets acquired and liabilities assumed as of the acquisition date:Estimated Fair Value at May 23,2024Cash$2.3 Goodwill816.5Property and equipment108.5Other assets and liabilities,net(0.3)Acquisition date fair value of consideration transferred927.0 Less:Cash acquired(2.3)Cash paid,net of cash acquired$924.7 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 theassembled workforce of the site,which is deductible for tax purposes.We are unable to provide the results of operations for the three and nine months ended September 30,2025 attributable to this acquisition asthe 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 ofoperations for the three and nine months ended September 30,2024.Asset AcquisitionsUpon each asset acquisition,the cost allocated to acquired IPR&D was immediately expensed as acquired IPR&D if the compound had noalternative future use.Milestone payment obligations incurred prior to regulatory approval of the compound were expensed as acquiredIPR&D when the event triggering an obligation to pay the milestone occurred.We recognized acquired IPR&D charges of$655.7 million and$2.38 billion for the three and nine months ended September 30,2025,respectively,and$2.83 billion and$3.09 billion for the three and ninemonths ended September 30,2024,respectively.The following table summarizes our significant acquired IPR&D charges during the threeand nine months ended September 30,2025 and 2024:CounterpartyCompound(s),Therapy or AssetAcquisition MonthPhase ofDevelopmentAcquired IPR&DChargeSiteOne Therapeutics,Inc.(SiteOne)STC-004,Nav1.8 inhibitor for thetreatment of painJuly 2025Phase 1$494.2 Scorpion Therapeutics,Inc.(Scorpion)STX-478,PI3K inhibitor for thetreatment of breast cancer and otheradvanced solid tumorsMarch 2025Phase 11,412.0 Morphic Holding,Inc.(Morphic)MORF-057,inhibitor of 47 integrinfor the treatment of inflammatory boweldiseaseAugust 2024Phase 22,548.5 The phase of development presented is as of the date of the arrangement and represents the phase of development of the most advanced asset acquired,where applicable.(1)(1)(1)(1)16Note 4:Collaborations and Other ArrangementsWe often enter into collaborative and other arrangements to develop and commercialize drug candidates or to sell the rights of a product.See Note 2 for a discussion of our recognition of revenue from our collaborations and other arrangements.Collaborative activities may include research and development,marketing and selling,manufacturing,and distribution for which we mayreceive from or pay to the collaboration partner expense reimbursements.Operating expenses for costs incurred pursuant to thesearrangements are reported in their respective expense line item,net of any payments due to or reimbursements due from our collaborationpartners,with such reimbursements being recognized at the time the party becomes obligated to pay.Each arrangement is unique in nature,and our more significant arrangements are discussed below.Boehringer Ingelheim CollaborationWe and Boehringer Ingelheim have a global agreement to jointly develop and commercialize a portfolio of compounds.BoehringerIngelheims Jardiance product family,that includes Glyxambi,Synjardy,and Trijardy XR,is the significant product family included in thecollaboration.For the Jardiance product family,we and Boehringer Ingelheim generally share equally in certain significant ongoing development andcommercialization costs,and we record our portion of the development and commercialization costs as research and development expenseand marketing,selling,and administrative expense,respectively.We receive a royalty on net sales of the Jardiance product family in themost significant markets and recognize the royalty as collaboration and other revenue.Boehringer Ingelheim is entitled to potentialperformance payments depending on the net sales of the Jardiance product family;therefore,our reported revenue for Jardiance may bereduced by any potential performance payments we make related to this product family.The royalty received by us related to the Jardianceproduct family may also be increased or decreased depending on whether net sales for this product family exceed or fall below certainthresholds.The following table summarizes our revenue recognized:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Jardiance$959.0$686.4$2,663.4$2,142.5 In the first quarter of 2025,we and Boehringer Ingelheim amended our collaboration to adjust commercialization responsibilities for theJardiance product family in certain markets,resulting in our recognition of a one-time benefit of$370.0 million as Jardiance revenue duringthe nine months ended September 30,2025.During the three and nine months ended September 30,2025,we recognized a$200.0 million sales-based milestone for Jardiance.As ofSeptember 30,2025,we have the right to receive up to$410.0 million in potential sales-based milestones related to the Jardiance productfamily in certain markets in 2026.EbglyssWe have a license agreement with F.Hoffmann-La Roche Ltd and Genentech,Inc.(collectively,Roche),which provides us the worldwidedevelopment and commercialization rights to lebrikizumab,which is branded and trademarked as Ebglyss.Roche receives tiered royaltypayments on worldwide net sales ranging in percentages from high single digits to high teens,which we recognize as cost of sales.As ofSeptember 30,2025,Roche is eligible to receive additional payments from us,including up to$975.0 million in potential sales-basedmilestones.During the three and nine months ended September 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,forthe treatment or prevention of dermatology indications,including,but not limited to,atopic dermatitis in Europe.We receive tiered royaltypayments on net sales in Europe ranging in percentages from low double digits to low twenties,which we recognize as collaboration andother revenue.During the three and nine months ended September 30,2025 and 2024,collaboration and other revenue recognized underthis license agreement was not material.As of September 30,2025,we are eligible to receive additional payments up to$1.25 billion in aseries of sales-based milestones.17OrforglipronWe have a license agreement with Chugai Pharmaceutical Co.,Ltd(Chugai),which provides us with the worldwide development andcommercialization rights to orforglipron.Chugai has the right to receive tiered royalty payments on future worldwide net sales from mid-singledigits to low teens if the product is successfully commercialized.As of September 30,2025,Chugai is eligible to receive up to$140.0 millioncontingent upon the achievement of success-based regulatory milestones and up to$250.0 million in a series of sales-based milestones,contingent upon the commercial success of orforglipron.During the three and nine months ended September 30,2025 and 2024,milestonepayments to Chugai were not material.Note 5:Asset Impairment,Restructuring,and Other Special ChargesAsset impairment,restructuring,and other special charges recognized during the three and nine months ended September 30,2025 were$364.9 million and$399.9 million,respectively,which primarily related to a litigation charge,as well as acquisition and integration costsassociated with the closing of our acquisition of Verve.Asset impairment,restructuring,and other special charges recognized during the three months ended September 30,2024 were$81.6million,which primarily related to impairment of an intangible asset in development driven by expected commercial projections.Assetimpairment,restructuring,and other special charges recognized during the nine months ended September 30,2024 were$516.6 million,which primarily related to a litigation charge and the previously mentioned impairment.See Note 10 for additional information related to litigation charges.Note 6:InventoriesThe following table summarizes components of inventories:September 30,2025December 31,2024Finished products$1,547.2$1,220.8 Work in process7,274.5 3,979.5 Raw materials and supplies3,397.1 2,326.0 Total(approximates replacement cost)12,218.8 7,526.3(Decrease)increase to last-in,first-out(LIFO)cost(38.4)62.9 Inventories$12,180.4$7,589.2 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 approvalprocess,potential impediments to the approval process such as safety or efficacy,viability of commercialization,and marketplace trends.Pre-launch inventories capitalized as of September 30,2025 were$952.3 million,primarily related to orforglipron.Note 7:Financial InstrumentsInvestments in Equity and Debt SecuritiesOur equity investments are accounted for using three different methods depending on the type of equity investment:Investments in companies over which we have significant influence but not a controlling interest are accounted for using the equitymethod,with our share of earnings or losses reported in other-net,(income)expense.For equity investments that do not have readily determinable fair values,we measure these investments at cost,less anyimpairment,plus or minus changes resulting from observable price changes in orderly transactions for the identical or similarinvestment of the same issuer.Any change in recorded value is recorded in other-net,(income)expense.Our public equity investments are measured and carried at fair value.Any change in fair value is recognized in other-net,(income)expense.18We adjust our equity investments without readily determinable fair values based upon changes in the equity instruments values resultingfrom observable price changes in orderly transactions for an identical or similar investment of the same issuer.Downward adjustmentsresulting from an impairment are recorded based upon impairment considerations,including the financial condition and near-term prospectsof the issuer,general market conditions,and industry specific factors.Adjustments recorded for the three and nine months endedSeptember 30,2025 and 2024 were not material.The net gains(losses)recognized in our consolidated condensed statements of operations for equity securities were$46.9 million and$14.1million for the three and nine months ended September 30,2025,respectively,and$112.4 million and$(29.5)million for the three and ninemonths ended September 30,2024,respectively.The net gains(losses)recognized for the three and nine months ended September 30,2025 and 2024 on equity securities sold during the respective periods were not material.As of September 30,2025,we had approximately$878 million of unfunded commitments to invest in venture capital funds,which weanticipate will be paid over a period of up to 10 years.We record our available-for-sale debt securities at fair value,with changes in fair value reported as a component of accumulated othercomprehensive income(loss).We periodically assess our investment in available-for-sale securities for impairment losses and credit losses.The amount of credit losses is determined by comparing the difference between the present value of future cash flows expected to becollected on these securities and the amortized cost.Factors considered in assessing credit losses include the position in the capitalstructure,vintage and amount of collateral,delinquency rates,current credit support,and geographic concentration.Impairment and creditlosses related to available-for-sale securities were not material for the three and nine months ended September 30,2025 and 2024.The table below summarizes the contractual maturities of our investments in debt securities measured at fair value as of September 30,2025:Maturities by PeriodTotalLess Than1 Year1-5Years6-10YearsMore Than10 YearsFair value of debt securities$356.0$12.7$119.4$63.8$160.1 A summary of the amount of unrealized gains and losses in accumulated other comprehensive loss and the fair value of available-for-salesecurities in an unrealized gain or loss position is as follows:September 30,2025December 31,2024Unrealized gross gains$3.3$1.6 Unrealized gross losses11.1 43.2 Fair value of securities in an unrealized gain position177.6 142.6 Fair value of securities in an unrealized loss position177.2 491.2 As of September 30,2025,the available-for-sale securities in an unrealized loss position include primarily fixed-rate debt securities of varyingmaturities,which are sensitive to changes in the yield curve and other market conditions.Substantially all of the fixed-rate debt securities in aloss position are investment-grade debt securities.As of September 30,2025,we do not intend to sell,and it is not more likely than not thatwe 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 costadjusted for any other-than-temporary declines in fair value that were recorded in earnings and were not material for the three and ninemonths ended September 30,2025 and 2024.Proceeds from sales of available-for-sale investments were$381.5 million and$470.3 millionfor the three and nine months ended September 30,2025,respectively,and$23.2 million and$68.6 million for the three and nine monthsended September 30,2024,respectively.19Fair Value of InvestmentsThe following table summarizes certain fair value information at September 30,2025 and December 31,2024 for investment assetsmeasured at fair value on a recurring basis,as well as the carrying amount and amortized cost of certain other investments:Fair Value Measurements Using CarryingAmountCostQuoted Pricesin ActiveMarkets forIdenticalAssets(Level 1)SignificantOther ObservableInputs(Level 2)SignificantUnobservable Inputs(Level 3)FairValueSeptember 30,2025Cash equivalents$7,400.1$7,400.1$7,400.1$7,400.1 Short-term investments:U.S.government and agency securities$7.8$7.9$7.8$7.8 Corporate debt securities4.9 4.9 4.9 4.9 Other securities108.9 108.9 11.4 97.5 108.9 Short-term investments$121.6 Noncurrent investments:U.S.government and agency securities$70.1$73.9$70.1$70.1 Corporate debt securities119.3 120.3 119.3 119.3 Mortgage-backed securities127.2 130.8 127.2 127.2 Asset-backed securities26.7 26.6 26.7 26.7 Other securities101.2 57.1 6.4 94.8 101.2 Marketable equity securities319.7 324.9 319.7 319.7 Equity investments without readily determinablefair values821.9 Equity method investments1,222.2 Noncurrent investments$2,808.3 December 31,2024Cash equivalents$1,506.9$1,506.9$1,494.1$12.8$1,506.9 Short-term investments:U.S.government and agency securities$29.2$29.3$29.2$29.2 Corporate debt securities65.3 65.4 65.3 65.3 Asset-backed securities0.6 0.7 0.6 0.6 Other securities59.7 59.7 16.7 43.0 59.7 Short-term investments$154.8 Noncurrent investments:U.S.government and agency securities$140.2$156.4$140.2$140.2 Corporate debt securities211.4 225.0 211.4 211.4 Mortgage-backed securities165.3 177.2 165.3 165.3 Asset-backed securities56.7 57.5 56.7 56.7 Other securities150.3 102.6 6.3 144.0 150.3 Marketable equity securities485.5 494.6 485.5 485.5 Equity investments without readily determinablefair values863.8 Equity method investments1,142.7 Noncurrent investments$3,215.9 For available-for-sale debt securities,amounts disclosed represent the securities amortized cost.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 investmentsapproximates fair value.Fair value disclosures are not applicable for equity method investments and investments accounted for under the measurement alternative for equity investments.(1)(2)(3)(3)(2)(3)(3)(1)(2)(3)20We determine our Level 1 and Level 2 fair value measurements based on a market approach using quoted market values,significant otherobservable inputs for identical or comparable assets or liabilities,or discounted cash flow analyses.Level 3 fair value measurements forother investment securities are determined using unobservable inputs,including the investments cost adjusted for impairments and pricechanges from orderly transactions.Fair values are not readily available for certain equity investments measured under the measurementalternative.DebtIn August 2025,we issued$750.0 million of floating-rate notes due in 2028,$1.00 billion of 4.000 percent fixed-rate notes due in 2028,$750.0 million of 4.250 percent fixed-rate notes due in 2031,$1.00 billion of 4.550 percent fixed-rate notes due in 2032,$1.25 billion of 4.900percent fixed-rate notes due in 2035,$1.00 billion of 5.550 percent fixed-rate notes due in 2055,and$1.00 billion of 5.650 percent fixed-ratenotes due in 2065.Interest on the fixed-rate notes is to be paid semi-annually.Interest on the floating-rate notes is calculated using theSecured Overnight Financing Rate(SOFR)plus a.530 percent spread,reset quarterly,and is to be paid quarterly.We have used,or expectto use,the net cash proceeds from this offering for general business purposes,including the repayment of commercial paper.In February 2025,we issued$1.00 billion of 4.550 percent fixed-rate notes due in 2028,$1.25 billion of 4.750 percent fixed-rate notes due in2030,$1.00 billion of 4.900 percent fixed-rate notes due in 2032,$1.25 billion of 5.100 percent fixed-rate notes due in 2035,$1.25 billion of5.500 percent fixed-rate notes due in 2055,and$750.0 million of 5.600 percent fixed-rate notes due in 2065,all with interest to be paid semi-annually.We used the net cash proceeds from this offering to fund the acquisition of Scorpions PI3K inhibitor program STX-478 and relatedfees and expenses and for general business purposes,including the repayment of commercial paper.In August 2024,we issued$5.00 billion aggregate principal amount of notes.We used a portion of the net cash proceeds to fund theacquisition of Morphic and related fees and expenses,with remaining funds used for general business purposes,including the repayment ofoutstanding commercial paper.In February 2024,we issued$6.50 billion aggregate principal amount of notes.We used the net cash proceeds from this offering for generalbusiness purposes,including the repayment of commercial paper,and the repayment of then-current maturities of long-term debt.In August 2025,we renewed our 364-day credit facility and increased capacity to$6.00 billion,which is available to support our commercialpaper program.We have not drawn against the 364-day facility as of September 30,2025.In August 2025,we extended our multi-year credit facility and increased capacity to$4.00 billion,which will now expire in December 2029and is available to support our commercial paper program.We have not drawn against the multi-year facility as of September 30,2025.Fair Value of DebtThe following table summarizes certain fair value information for our short-term and long-term debt:Fair Value Measurements Using CarryingAmountQuoted Prices inActive Marketsfor IdenticalAssets(Level 1)SignificantOther ObservableInputs(Level 2)SignificantUnobservable Inputs(Level 3)FairValueShort-term commercial paper borrowingsSeptember 30,2025$December 31,20244,337.6 4,319.4 4,319.4 Long-term debt,including current portionSeptember 30,202542,506.6 39,991.3 39,991.3 December 31,202429,306.7 26,249.0 26,249.0 21Risk Management and Related Financial InstrumentsFinancial 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 seekto mitigate the risk associated with this concentration through our ongoing credit-review procedures and insurance.The majority of our cashis held by a few major financial institutions that have been identified as Global Systemically Important Banks(G-SIBs)by the FinancialStability Board.G-SIBs are subject to rigorous regulatory testing and oversight and must meet certain capital requirements.We monitor ourexposures with these institutions and do not expect any of these institutions to fail to meet their obligations.In accordance with documentedcorporate risk-management policies,we monitor the amount of credit exposure to any one financial institution or corporate issuer based onthe 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 creditratings.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 effectivecontrol over,and risk related to,the receivables to the buyers.We derecognized$440.4 million and$421.6 million of accounts receivable asof September 30,2025 and December 31,2024,respectively,under these factoring arrangements.The costs of factoring such accountsreceivable as well as estimated credit losses were not material for the three and nine months ended September 30,2025 and 2024.Our derivative activities are initiated within the guidelines of documented corporate risk-management policies and are intended to offsetlosses and gains on the assets,liabilities,and transactions being hedged.Management reviews the correlation and effectiveness of ourderivatives on a quarterly basis.For derivative instruments that are designated and qualify as fair value hedges,the derivative instrument is marked to market,with gains andlosses recognized currently in income to offset the respective losses and gains recognized on the underlying exposure.For derivativeinstruments that are designated and qualify as cash flow hedges,gains and losses are reported as a component of accumulated othercomprehensive income(loss)(see Note 11)and reclassified into earnings in the same period the hedged transaction affects earnings.Forderivative and non-derivative instruments that are designated and qualify as net investment hedges,the foreign currency translation gains orlosses due to spot rate fluctuations are reported as a component of accumulated other comprehensive income(loss)(see Note 11).Derivative contracts that are not designated as hedging instruments are recorded at fair value with the gain or loss recognized in earningsduring the period of change.We manage foreign currency exchange risk through the use of foreign currency debt,cross-currency interest rate swaps,and foreigncurrency forward contracts.Our foreign currency-denominated notes had carrying amounts of$6.79 billion and$6.03 billion as ofSeptember 30,2025 and December 31,2024,respectively,of which$6.02 billion and$5.34 billion have been designated as,and areeffective as,hedges of net investments in certain of our foreign operations as of September 30,2025 and December 31,2024,respectively.At September 30,2025,we had outstanding cross-currency interest rate swaps with notional amounts of 402.0 million Swiss francs swappingSwiss 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 September 30,2025,we had outstanding foreign currency forward contracts to sell 34.98 billioneuro and to sell 4.95 billion Chinese yuan with settlement dates ranging through 2026,which have been designated as,and are effective as,hedges of net investments.22We may also enter into foreign currency forward or option contracts as economic hedges to manage exposures arising from subsidiary tradeand loan payables and receivables denominated in foreign currencies(primarily the euro,Japanese yen,Chinese yuan,and British poundsterling).Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlyingexposures.These contracts are recorded at fair value with the gain or loss recognized in othernet,(income)expense.Forward contractsgenerally have maturities not exceeding 12 months.At September 30,2025,our significant outstanding foreign currency forwardcommitments were as follows,all of which have settlement dates within 180 days:September 30,2025PurchaseSellCurrencyAmount(in millions)CurrencyAmount(in millions)Euro40,432.1U.S.dollars47,801.5U.S.dollars3,275.1Euro2,776.8U.S.dollars1,434.5Chinese yuan10,167.2In the normal course of business,our operations are exposed to fluctuations in interest rates which can vary the costs of financing,investing,and operating.We seek to address a portion of these risks through a controlled program of risk management that includes the use ofderivative financial instruments.The objective of controlling these risks is to limit the impact of fluctuations in interest rates on earnings.Ourprimary interest rate risk exposure results from changes in short-term U.S.dollar interest rates.In an effort to manage interest rateexposures,we strive to achieve an acceptable balance between fixed-and floating-rate debt and investment positions and may enter intointerest rate swaps or collars to help maintain that balance.Interest rate swaps or collars that convert our fixed-rate debt to a floating rate are designated as fair value hedges of the underlyinginstruments.Interest rate swaps or collars that convert floating-rate debt to a fixed rate are designated as cash flow hedges.Interest expenseon the debt is adjusted to include the payments made or received under the swap agreements.Cash proceeds from or payments tocounterparties resulting from the termination of interest rate swaps are classified as operating activities in our consolidated condensedstatements of cash flows.At September 30,2025,substantially all of our total long-term debt is at a fixed rate.We have convertedapproximately 4 percent of our long-term fixed-rate notes to floating rates through the use of interest rate swaps.We also may enter into forward-starting interest rate swaps and treasury locks,which we designate as cash flow hedges,as part of anyanticipated future debt issuances in order to reduce the risk of cash flow volatility from future changes in interest rates.The change in fairvalue of these instruments is recorded as part of other comprehensive income(loss)(see Note 11)and,upon completion of a debt issuanceand termination of the instrument,is amortized to interest expense over the life of the underlying debt.Cash proceeds or payments from thetermination of these instruments are classified as operating activities in our consolidated condensed statements of cash flows.23The Effect of Risk-Management Instruments on the Consolidated Condensed Statements of OperationsThe following effects of risk-management instruments were recognized in othernet,(income)expense:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Fair value hedges:Effect from hedged fixed-rate debt$8.7$48.0$64.1$29.0 Effect from interest rate contracts(8.7)(48.0)(64.1)(29.0)Cash flow hedges:Effective portion of losses on interest rate contractsreclassified from accumulated other comprehensive loss0.2 1.4 3.0 5.8 Cross-currency interest rate swaps(0.2)(28.8)(60.8)58.5 Net(gains)losses on foreign currency exchange contractsnot designated as hedging instruments170.3(0.2)(468.4)33.8 Total$170.3$(27.6)$(526.2)$98.1 During the three and nine months ended September 30,2025 and 2024,the amortization of losses related to the portion of our riskmanagement hedging instruments,fair value hedges,and cash flow hedges that was excluded from the assessment of effectiveness was notmaterial.The Effect of Risk-Management Instruments on Other Comprehensive Income(Loss)The effective portion of risk-management instruments that was recognized in other comprehensive income(loss)is as follows:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Net investment hedges:Foreign currency-denominated notes$5.5$(250.2)$(682.7)$(76.3)Cross-currency interest rate swaps(26.0)(10.5)(6.8)Foreign currency forward contracts0.6(304.1)(1,292.1)(172.3)Cash flow hedges:Forward-starting interest rate swaps14.3(23.6)(10.4)53.8 Cross-currency interest rate swaps(2.8)(7.9)(6.9)7.7 During the three and nine months ended September 30,2025 and 2024,the amounts excluded from the assessment of hedge effectivenessrecognized in other comprehensive income(loss)were not material.As of September 30,2025,the amount of pre-tax gains or losses oncash flow hedges expected to be reclassified from accumulated other comprehensive income(loss)to othernet,(income)expense duringthe next 12 months is not material.24Fair Value of Risk-Management InstrumentsThe following table summarizes certain fair value information at September 30,2025 and December 31,2024 for risk management assetsand liabilities measured at fair value on a recurring basis:Fair Value Measurements Using CarryingAmountQuoted Prices inActive Markets forIdentical Assets(Level 1)SignificantOther ObservableInputs(Level 2)SignificantUnobservable Inputs(Level 3)FairValueSeptember 30,2025Risk-management instruments:Interest rate contracts designated as fair value hedges:Other noncurrent assets$15.9$15.9$15.9 Other current liabilities(1.3)(1.3)(1.3)Other noncurrent liabilities(69.7)(69.7)(69.7)Cross-currency interest rate contracts designated ascash flow hedges:Other noncurrent assets103.9 103.9 103.9 Foreign exchange contracts designated as netinvestment hedges:Other receivables306.0 306.0 306.0 Other current liabilities(702.2)(702.2)(702.2)Foreign exchange contracts not designated as hedginginstruments:Other receivables19.9 19.9 19.9 Other current liabilities(238.0)(238.0)(238.0)Contingent consideration liabilities:Other noncurrent liabilities(226.9)(226.9)(226.9)December 31,2024Risk-management instruments:Interest rate contracts designated as fair value hedges:Other current liabilities$(2.0)$(2.0)$(2.0)Other noncurrent liabilities(117.8)(117.8)(117.8)Cross-currency interest rate contracts designated asnet investment hedges:Other receivables10.3 10.3 10.3 Cross-currency interest rate contracts designated ascash flow hedges:Other noncurrent assets50.7 50.7 50.7 Foreign exchange contracts designated as hedginginstruments:Other receivables297.0 297.0 297.0 Foreign exchange contracts not designated as hedginginstruments:Other receivables39.5 39.5 39.5 Other current liabilities(93.4)(93.4)(93.4)Contingent consideration liabilities:Other noncurrent liabilities(32.3)(32.3)(32.3)25Risk-management instruments above are disclosed on a gross basis.There are various rights of setoff associated with certain of the risk-management instruments above that are subject to enforceable master netting arrangements or similar agreements.Although various rightsof setoff and master netting arrangements or similar agreements may exist with the individual counterparties to the risk-managementinstruments above,individually,these financial rights are not material.Contingent consideration liabilities relate to our liabilities arising in connection with the CVRs issued as a result of acquisitions of businesses.The fair values of the CVR liabilities were estimated using a discounted cash flow analysis and Level 3 inputs,including projectionsrepresentative of a market participants view of the expected cash payments associated with the agreed upon regulatory milestones basedon probabilities of technical success,timing of the potential milestone events for the compounds,and estimated discount rates.Note 8:Income TaxesIn July 2025,the One Big Beautiful Bill Act(OBBBA),which implemented certain U.S.tax law changes,was enacted into law.The OBBBAmodified and made permanent several provisions of the Tax Cuts and Jobs Act,including reductions in scheduled increases for the rate oftaxation of foreign income,immediate deductibility of U.S.research and development expenses,and reinstatement of 100%bonusdepreciation for capital assets.For the three months ended September 30,2025,we recorded income tax expense of$350.3 million relatedto adjusting our income tax provision for prior periods of 2025 and remeasuring our deferred tax assets and liabilities in connection with theenactment of OBBBA.The effective tax rates were 22.8 percent and 19.8 percent for the three and nine months ended September 30,2025,respectively,comparedto 38.9 percent and 19.1 percent for the three and nine months ended September 30,2024,respectively,primarily driven by unfavorable taximpacts of non-deductible acquired IPR&D charges,with a larger impact occurring in 2024.As a result of the OBBBA,the effective tax ratesfor the three and nine months ended September 30,2025 were unfavorably impacted by incremental tax expense recognized in theseperiods.At September 30,2025 and December 31,2024,prepaid expenses included prepaid taxes of$18.69 billion and$7.13 billion,respectively.The U.S.examination of tax years 2019-2021 remains ongoing.For tax years 2016-2018,we are pursuing competent authority assistancethrough the Mutual Agreement Procedure process for the pricing of certain intercompany transactions.The resolution of both audit periodswill likely extend beyond the next 12 months.26Note 9:Retirement BenefitsNet pension and retiree health(benefit)cost included the following components:Defined Benefit Pension PlansThree Months Ended September 30,Nine Months Ended September 30,2025202420252024Components of net periodic(benefit)cost:Service cost$76.7$84.9$242.9$254.3 Interest cost175.3 165.9 523.1 496.6 Expected return on plan assets(272.7)(278.8)(813.9)(834.3)Amortization of prior service cost0.6 0.6 1.6 1.6 Recognized actuarial loss14.1 31.4 56.9 93.8 Net periodic(benefit)cost$(6.0)$4.0$10.6$12.0 Retiree Health Benefit PlansThree Months Ended September 30,Nine Months Ended September 30,2025202420252024Components of net periodic benefit:Service cost$8.3$8.9$24.7$26.6 Interest cost16.0 15.5 48.0 46.6 Expected return on plan assets(46.3)(48.0)(138.7)(144.1)Amortization of prior service benefit(0.1)(1.4)(0.3)(4.2)Recognized actuarial gain(0.9)(0.6)(2.8)(1.9)Net periodic benefit$(23.0)$(25.6)$(69.1)$(77.0)Note 10:ContingenciesWe are and may become involved in various lawsuits,claims,government investigations and other legal proceedings that arise from time totime in the course of our business,including patent,environmental,commercial,contractual,licensing,employment,health and safety,consumer fraud,pricing,access,consumer,sales and marketing,product liability,insurance,antitrust,securities,and regulatory compliancematters,among others.Such matters may involve inquiries from or disputes with various types of parties,including governments,regulatoryagencies,competitors,customers,suppliers,service providers,licensees,employees,or shareholders,among others.We cannot predict thefinal outcome of these proceedings,and while we intend to vigorously prosecute or defend our position as appropriate,there can be noassurance that we will be successful or obtain any requested relief.Matters often develop over a long period of time and expectations canchange as a result of new findings,rulings,appeals,settlements,legal or regulatory changes,or other factors.From time to time we maydiscontinue or settle and compromise matters as appropriate in our best interest.Legal proceedings that we believe are significant or could become significant or material are described below.For proceedings in which weare named as defendants,unless otherwise noted,we cannot reasonably estimate the maximum potential exposure or the range of possibleloss in excess of amounts accrued;however,we believe that the resolution of all such matters will not have a material adverse effect on ourconsolidated financial position or liquidity,but could possibly be material to our consolidated results of operations in any one accountingperiod.Litigation accruals and environmental liabilities and any related estimated insurance recoverables are reflected on a gross basis as liabilitiesand assets,respectively,on our consolidated balance sheets.We accrue for estimated exposures to the extent they are both probable andreasonably estimable based on the then available information.We accrue for certain unfiled product liability claims to the extent we canformulate a reasonable estimate of their exposure.We estimate these exposures based primarily on historical claims experience and dataregarding product usage.Legal defense costs expected to be incurred in connection with significant liability loss contingencies are accruedwhen both probable and reasonably estimable.Because of the nature of pharmaceutical products,it is possible that we could become subject to large numbers of additional product liabilityand related claims in the future.Due to a very restrictive market for litigation liability insurance,we are self-insured for litigation liability lossesfor all our currently and previously marketed products.27Patent MattersIn the course of our business,we are subject to actions and proceedings by third parties that seek to challenge,invalidate,or circumvent ourpatents and patent applications relating to our products,product candidates,and technologies,including the matter described below.Emgality Patent LitigationIn September 2018,Teva Pharmaceuticals International GmbH and Teva Pharmaceuticals USA,Inc.(collectively,Teva)filed a complaint inthe U.S.District Court for the District of Massachusetts alleging that Lillys launch and continued sales of Emgality infringed various claims inthree Teva patents.In November 2022,following a trial,a jury returned a verdict in favor of Teva.In September 2023,the trial court overruledthe jury verdict,found all asserted claims invalid,and entered judgment in Lillys favor.In October 2023,Teva appealed to the U.S.Court ofAppeals for the Federal Circuit.The appeal is pending.Environmental MattersSuperfund MattersUnder the Comprehensive Environmental Response,Compensation,and Liability Act,commonly known as Superfund,we have beendesignated as one of several potentially responsible parties with respect to the cleanup of fewer than 10 sites.Under Superfund,eachresponsible party may be jointly and severally liable for the entire amount of the cleanup.Brazil Litigation Cosmopolis FacilityLabor Attorney LitigationIn March 2008,the state Labor Public Attorney(LPA)filed a public civil action against Eli Lilly do Brasil Limitada(Lilly Brasil)in the LaborCourt of Paulinia,State of Sao Paulo,alleging harm to employees and former employees from alleged exposure to soil and groundwatercontaminants at a former manufacturing facility in Cosmopolis,operated by the company between 1977 and 2003.In May 2014,the trialcourt ruled against Lilly Brasil,ordering it to undertake several remedial and compensatory actions,including health coverage for a class ofindividuals and certain of their children.The trial courts ruling included a liquidated award of 300 million Brazilian reais,which,when adjustedfor inflation,is approximately 1.54 billion Brazilian reais(approximately$290 million as of September 30,2025).In July 2018,the appealscourt generally affirmed the trial courts ruling.Lilly Brasil has appealed to the superior labor court(TST)and the TST heard oral argument onthe appeal in October 2025.In July 2019,at the LPAs request,the trial court ordered a freeze of Lilly Brasils immovable property in the amount of 500 million Brazilianreais,which was reduced on Lillys appeal and,when adjusted for inflation,is approximately 160.2 million Brazilian reais(approximately$30 million as of September 30,2025).Both parties have appealed this order to the TST.The trial court is currently assessing the status of Lilly Brasils compliance with the obligations as to the land,and an inspection in theindustrial plant occurred in October 2023.Former Employee LitigationVarious former employees have filed related claims against Lilly Brasil in the trial court.These lawsuits are at various stages in the litigationprocess.Pricing Matters340B Litigation and InvestigationsIn January 2021,we filed a lawsuit in the U.S.District Court for the Southern District of Indiana against the U.S.Department of Health andHuman Services(HHS),the Secretary of HHS,the Health Resources and Services Administration(HRSA),and the Administrator of HRSA.The lawsuit challenges HHSs December 2020 advisory opinion that the 340B program requires drug manufacturers to deliver discounts to allcontract pharmacies,as well as HHSs December 2020 administrative dispute resolution(ADR)regulations.It seeks a declaratory judgmentthat the defendants violated the Administrative Procedure Act(APA)and the U.S.Constitution,a preliminary injunction enjoiningimplementation of the ADR process and application of the advisory opinion,and other related relief.In March 2021,the court preliminarilyenjoined the governments use of the ADR process as to us.In May 2021,we amended the complaint to add claims related to a May 2021letter from HRSA asserting that Lillys contract pharmacy policy violated the 340B statute.In October 2021,the court granted in part anddenied in part the parties cross-motions for summary judgment.Both parties appealed to the U.S.Court of Appeals for the Seventh Circuit.The appeal remains pending.28We received a civil investigative subpoena in February 2021 from the Office of the Attorney General for the State of Vermont relating to thesale of pharmaceutical products to Vermont covered entities under the 340B program.We are cooperating with the subpoena.We have been named in various ADR petitions,filed in 2021,2023,and 2024,seeking declaratory,injunctive,and/or monetary relief relatedto the 340B program.In light of the preliminary injunction order described above,these petitions are being held in abeyance as to us.In July 2021,Mosaic Health,Inc.filed a putative class action lawsuit in the U.S.District Court for the Western District of New York against us,Sanofi-Aventis U.S.,LLC(Sanofi),Novo Nordisk Inc.(Novo Nordisk),and AstraZeneca Pharmaceuticals LP(AstraZeneca),alleging antitrustand unjust enrichment claims related to the defendants 340B programs.In October 2021,an amended complaint added Central VirginiaHealth Services,Inc.as a plaintiff.In September 2022,the court dismissed the amended complaint for failure to state a claim but allowed theplaintiffs to move for leave to file a second amended complaint.In January 2024,the court denied the plaintiffs motion for leave to amendand dismissed the case.In August 2025,the U.S.Court of Appeals for the Second Circuit reversed the district courts decision and remandedthe case for further proceedings.In September 2025,we filed a petition for panel rehearing and rehearing en banc.In October 2025,theSecond Circuit denied our petition for panel rehearing and issued an amended opinion reaching the same result.Our petition for rehearingen banc remains pending.We have multiple other challenges against HHS and related parties related to interpretations and actions under the 340B program.Insulin Pricing LitigationSince 2017,various plaintiffs,including consumers,states and state attorneys general,counties,municipalities,Native American tribes,school districts,wholesalers,third-party payers,and others,have filed lawsuits,including putative class actions,against us,othermanufacturers,pharmacy benefit managers,and others,relating to the pricing of insulin medications,and in some cases other diabetesmedications,and rebates paid by manufacturers to pharmacy benefit managers.The complaints in the various lawsuits assert a variety ofclaims,including among others consumer protection,unfair or deceptive trade practices,fraud,false advertising,unjust enrichment,civilconspiracy,racketeering,antitrust,and unfair competition claims.Most cases have been coordinated or consolidated for pretrial proceedingsin a multidistrict litigation(MDL)pending in the U.S.District Court for the District of New Jersey.The lawsuits are at various stages in thelitigation process.In the first-filed case,a putative consumer class action,we and the plaintiffs reached a proposed settlement in May 2023.In January 2024,the court denied the plaintiffs motion for class certification.We and the plaintiffs subsequently terminated our proposed settlement andstipulated that the courts ruling denying class certification applied to Lilly.The MDL court has issued various case management and other orders,including but not limited to orders establishing separate tracks forstate attorney general claims(State AG Track),putative class actions(Class Action Track),and non-class suits by self-funded payers(Self-Funded Payer Track);orders dismissing certain claims;and an order setting a constructive notice date of January 14,2021 for statute oflimitations purposes.In January 2022,the Michigan attorney general filed a petition in Michigan state court seeking authorization to investigate Lilly for potentialviolations of the Michigan Consumer Protection Act(MCPA),along with a complaint seeking a declaratory judgment that the state hasauthority to investigate Lillys sale of insulin under the MCPA.The court authorized the proposed investigation and the issuance of civilinvestigative subpoenas.In April 2022,however,the parties entered into a stipulation providing that the state will not issue any civilinvestigative subpoena to us under the MCPA until the declaratory judgment action is resolved,and in July 2022,the court dismissed thecase in its entirety.In June 2023,the Michigan Court of Appeals affirmed the judgment in our favor.In April 2025,the Michigan SupremeCourt granted the states application for leave to appeal and ordered oral argument.Lilly has entered into settlement agreements with two states to resolve allegations relating to insulin pricing.In particular,in February 2024,after discovery,Lilly entered into a non-monetary settlement with the Minnesota attorney generals office that resolved a lawsuit filed byMinnesota in 2018;and Lilly entered into a similar non-monetary settlement with the New York attorney generals office in May 2023.Theseagreements involved no monetary payments and no admission of wrongdoing or liability.29Insulin and Other Pricing InvestigationsWe have been subject to various investigations and received subpoenas,civil investigative demands,information requests,interrogatories,and other inquiries from various governmental entities related to pricing issues,including the pricing and sale of insulin medications,and insome instances certain other diabetes medications,and/or calculations of average manufacturer price and best price.These includesubpoenas and civil investigative demands from the U.S.Department of Justice,the U.S.Federal Trade Commission,and the Colorado,Indiana,Louisiana,Oregon,Texas,Vermont and Washington attorney general offices,as well as information requests from the California,Florida,Hawaii,Mississippi,New Mexico,Nevada,and Washington D.C.attorney general offices.To the extent the foregoing governmental entities have not filed lawsuits,we are cooperating with the various investigations,subpoenas,andinquiries.Average Manufacturer Price LitigationIn November 2014,a relator filed a qui tam action in the U.S.District Court for the Northern District of Illinois against us and TakedaPharmaceuticals America,Inc.The relators complaint alleges that the defendants should have treated certain credits from distributors asretroactive price increases and included such increases in calculating average manufacturer prices.In August 2022,following a trial,the juryreturned a verdict in favor of the relator.In September 2025,the U.S.Court of Appeals for the Seventh Circuit affirmed and we recognized acharge related to the matter.In October 2025,we filed a petition for rehearing en banc.Other MattersActos LitigationWe,along with Takeda Chemical Industries,Ltd.and Takeda affiliates(collectively,Takeda),are named in a third-party payer class action inthe U.S.District Court for the Central District of California.The plaintiffs allege that bladder cancer risk was concealed from them and claimthat as a result they and a proposed class of third-party payers are entitled to recover money paid for Actos prescriptions.Our agreementwith Takeda calls for Takeda to defend and indemnify us against losses and expenses with respect to U.S.litigation arising out of themanufacture,use,or sale of Actos and other related expenses in accordance with the terms of the agreement.In May 2023,the district courtgranted class certification.In June 2025,the U.S.Court of Appeals for the Ninth Circuit denied our appeal of the class certification order,andin August 2025 it denied our petition for rehearing en banc.Mounjaro,Trulicity,and Zepbound Product Liability LitigationSince August 2023,various plaintiffs have filed lawsuits against us,Novo Nordisk A/S(Novo),and other related Novo entities,alleginginjuries following purported use of incretin medicines,including Mounjaro,Trulicity,and Zepbound.The complaints assert a variety of claimsand generally seek damages,and/or other relief.Most of these lawsuits have been coordinated or consolidated for pretrial proceedings in afederal MDL pending in the U.S.District Court for the Eastern District of Pennsylvania.There are also cases pending in various other federaland state courts.In addition to the cases in the United States,there are two class action petitions in Israel.Branchburg Manufacturing FacilityIn May 2021,we received a subpoena from the U.S.Department of Justice requesting the production of certain documents relating to ourmanufacturing site in Branchburg,New Jersey.We have cooperated with the subpoena.Health Choice AllianceIn October 2019,a relator filed a qui tam lawsuit against us in Texas state court asserting claims under the Texas Medicaid Fraud PreventionAct(TMFPA)based on allegations about certain patient support programs related to three of our products.The relator sought to recover thevalue of payments by the Texas Medicaid Program for these products,as well as civil penalties and other relief.In August 2025,the relatorpurported to dismiss the first lawsuit and filed a second lawsuit in a different Texas state court.We are opposing the relators purporteddismissal of the first lawsuit.The second lawsuit purports to add the State of Texas as a party and asserts claims under the TMFPA based onallegations about patient support programs related to fifteen of our products.30Research Corporation Technologies,Inc.In April 2016,Research Corporation Technologies,Inc.(RCT)filed a lawsuit against us in the U.S.District Court for the District of Arizonaasserting damages claims for breach of contract,unjust enrichment,and conversion related to processes used to manufacture certainproducts,including Humalog and Humulin.In October 2021,the court issued a summary judgment decision in favor of RCT on certainissues,including with respect to a disputed royalty.In July 2024,we reached a confidential agreement with RCT that requires differentpayments based on various litigation outcomes as determined on appeal.The settlement agreement is not an admission of liability or faultand is subject to conditions.Pursuant to the agreement,the court entered final judgment,Lilly filed a notice of appeal to the U.S.Court ofAppeals for the Ninth Circuit,and Lilly made an initial payment under the agreement.Lillys appeal remains pending.The remaining amountpayable under the agreement,if any,should not have a material impact on our financial position,liquidity or results of operations.Note 11:Other Comprehensive Income(Loss)The following tables summarize the activity related to each component of other comprehensive income(loss)during the three months endedSeptember 30,2025 and 2024:(Amounts presented net of taxes)Foreign CurrencyTranslationGains(Losses)Net UnrealizedGains(Losses)onAvailable-For-Sale SecuritiesRetirement BenefitPlansNet UnrealizedGains(Losses)onCash Flow HedgesAccumulated OtherComprehensive LossBalance at July 1,2025$(1,757.8)$(21.3)$(2,193.4)$256.5$(3,716.0)Other comprehensive income(loss)beforereclassifications466.0 4.1 9.6 8.5 488.2 Net amount reclassified from accumulated othercomprehensive loss 11.1 10.8(0.4)21.5 Net other comprehensive income(loss)466.0 15.2 20.4 8.1 509.7 Balance at September 30,2025$(1,291.8)$(6.1)$(2,173.0)$264.6$(3,206.3)(Amounts presented net of taxes)Foreign CurrencyTranslationGains(Losses)Net UnrealizedGains(Losses)onAvailable-For-Sale SecuritiesRetirement BenefitPlansNet UnrealizedGains(Losses)onCash Flow HedgesAccumulated OtherComprehensive LossBalance at July 1,2024$(2,001.6)$(32.6)$(2,633.6)$289.3$(4,378.5)Other comprehensive income(loss)beforereclassifications117.9 15.9(28.9)(25.0)79.9 Net amount reclassified from accumulated othercomprehensive loss 23.7 0.1 23.8 Net other comprehensive income(loss)117.9 15.9(5.2)(24.9)103.7 Balance at September 30,2024$(1,883.7)$(16.7)$(2,638.8)$264.4$(4,274.8)31The following tables summarize the activity related to each component of other comprehensive income(loss)during the nine months endedSeptember 30,2025 and 2024:(Amounts presented net of taxes)Foreign CurrencyTranslationGains(Losses)Net UnrealizedGains(Losses)onAvailable-For-Sale SecuritiesRetirement BenefitPlansNet UnrealizedGains(Losses)onCash Flow HedgesAccumulated OtherComprehensive LossBalance at January 1,2025$(2,389.6)$(31.7)$(2,178.7)$278.1$(4,321.9)Other comprehensive income(loss)beforereclassifications1,062.3 13.9(38.0)(14.2)1,024.0 Net amount reclassified from accumulated othercomprehensive loss35.5 11.7 43.7 0.7 91.6 Net other comprehensive income(loss)1,097.8 25.6 5.7(13.5)1,115.6 Balance at September 30,2025$(1,291.8)$(6.1)$(2,173.0)$264.6$(3,206.3)(Amounts presented net of taxes)Foreign CurrencyTranslationGains(Losses)Net UnrealizedGains(Losses)onAvailable-For-Sale SecuritiesRetirement BenefitPlansNet UnrealizedGains(Losses)onCash Flow HedgesAccumulated OtherComprehensive LossBalance at January 1,2024$(1,819.0)$(26.2)$(2,697.3)$215.5$(4,327.0)Other comprehensive income(loss)beforereclassifications(74.9)9.3(12.1)48.5(29.2)Net amount reclassified from accumulated othercomprehensive loss10.2 0.2 70.6 0.4 81.4 Net other comprehensive income(loss)(64.7)9.5 58.5 48.9 52.2 Balance at September 30,2024$(1,883.7)$(16.7)$(2,638.8)$264.4$(4,274.8)Note 12:OtherNet,(Income)ExpenseOthernet,(income)expense consisted of the following:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Interest expense$179.6$192.7$672.4$555.9 Interest income(65.0)(47.8)(153.3)(130.9)Net investment(gains)losses on equity securities(Note 7)(46.9)(112.4)(14.1)29.5 Retirement benefit plans(114.0)(115.4)(326.1)(345.9)Other(income)expense179.4 20.9 283.8(0.1)Othernet,(income)expense$133.1$(62.0)$462.7$108.5 32Note 13:Segment InformationWe operate as a single reportable segment engaged in the discovery,development,manufacturing,marketing,and sales of pharmaceuticalproducts worldwide.A global research and development organization and a supply chain organization are responsible for the discovery,development,manufacturing,and supply of our products.Our commercial organizations market,distribute,and sell the products.Thebusiness is also supported by global corporate staff functions.Our determination that we operate as a single segment is consistent with thenature of our operations and the financial information regularly reviewed by the chief executive officer,in his capacity as the chief operatingdecision maker(CODM),for the purposes of evaluating performance,allocating resources,setting incentive compensation targets,andplanning and forecasting for future periods.Our purpose is to unite caring with discovery to create medicines that make life better for people around the world.Our long-term success issignificantly dependent on our ability to research and develop innovative medicines.The CODM uses consolidated net income to assessperformance of our company,ensuring that we are investing in future research and development while efficiently delivering products topatients.The CODM allocates research and development resources based upon several factors,including the likelihood of technicalsuccess,unmet medical needs,and the viability of commercial success.A significant component of the CODMs decision-making process isto ensure a balanced investment in our research and development portfolio to drive near-term success and sustain for the long-term.The following table summarizes our segment revenue,significant segment expenses,and segment profit:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Revenue$17,600.8$11,439.1$45,887.0$31,509.9 Less:Cost of sales3,008.3 2,170.8 7,680.3 6,014.5 Early-stage research and development1,249.6 995.3 3,395.6 2,872.6 Late-stage research and development2,216.1 1,738.8 6,139.9 5,095.5 Marketing,selling,and administrative2,740.7 2,099.8 7,962.6 6,169.3 Acquired in-process research and development655.7 2,826.4 2,381.2 3,091.2 Other segment items2,147.9 637.7 4,325.1 2,086.6 Net income$5,582.5$970.3$14,002.3$6,180.2 Early-stage research and development primarily includes costs incurred from discovery through Phase 2 clinical trials.Late-stage research and development primarilyincludes costs incurred from Phase 3 clinical trials.Other segment items primarily include income taxes and asset impairment,restructuring,and other special charges.The following tables summarize additional segment information:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Interest expense$179.6$192.7$672.4$555.9 Interest income65.0 47.8 153.3 130.9 Depreciation and amortization470.0 466.8 1,411.3 1,281.8 Asset impairment,restructuring,and other special charges364.9 81.6 399.9 516.6 Earnings(loss)in equity method investments45.4 26.0(29.4)65.6 Income taxes1,649.9 618.1 3,462.5 1,461.5 Expenditures for long-lived assets2,319.7 1,465.6 5,821.4 3,926.5 Includes expenditures for property and equipment and computer software costs.September 30,2025December 31,2024Total assets$114,935.4$78,714.9 Equity method investments1,222.2 1,142.7(1)(1)(2)(1)(2)(1)(1)33Item 2.Managements Discussion and Analysis of Results of Operations and Financial Condition(Tables present dollars in millions,except per-share data,and numbers may not add due to rounding)GeneralManagements discussion and analysis of results of operations and financial condition is intended to assist the reader in understanding andassessing significant changes and trends related to our results of operations and financial position.This discussion and analysis should beread in conjunction with the consolidated condensed financial statements and accompanying footnotes in Part I,Item 1 of this QuarterlyReport on Form 10-Q.Certain statements in this Part I,Item 2 of this Quarterly Report on Form 10-Q constitute forward-looking statements.Various risks and uncertainties,including those discussed in Forward-Looking Statements in this Quarterly Report on Form 10-Q and RiskFactors in Part I,Item 1A of our Annual Report on Form 10-K for the year ended December 31,2024,may cause our actual results,financialposition,and cash generated from operations to differ from these forward-looking statements.EXECUTIVE OVERVIEWThis section provides an overview of our financial results,updates to our clinical development pipeline,and other matters affecting ourcompany and industry.Financial ResultsThe following table summarizes certain financial information:Three Months Ended September 30,PercentChangeNine Months Ended September 30,PercentChange2025202420252024Revenue$17,600.8$11,439.1 54$45,887.0$31,509.9 46Net income5,582.5 970.3 NM14,002.3 6,180.2 127Earnings per share-diluted6.21 1.07 NM15.56 6.83 128NM-not meaningfulRevenue increased for the three and nine months ended September 30,2025,driven by increased volume,partially offset by lower realizedprices.The increased volume and lower realized prices during the three and nine months ended September 30,2025 were primarily drivenby Mounjaro and Zepbound.Net income and earnings per share for the three and nine months ended September 30,2025 increased primarily due to higher grossmargin,partially offset by increased marketing,selling,and administrative expenses and research and development expenses.See Results of Operations for additional information.34Clinical Development Pipeline UpdatesOur long-term success depends on our ability to continually discover or acquire,develop,and commercialize innovative new medicines.See“Managements Discussion and Analysis of Results of Operations and Financial ConditionExecutive OverviewClinical DevelopmentPipeline”in Part II,Item 7 of our Annual Report on Form 10-K for the year ended December 31,2024 for select new molecular entities(NMEs)and new indication line extension(NILEX)products in Phase 2 or Phase 3 clinical trials or that were submitted for regulatory reviewor received regulatory approval in the U.S.,European Union(EU),or Japan.The following reflects certain developments since our AnnualReport on Form 10-K for the year ended December 31,2024:CompoundDevelopmentTirzepatideSubmitted our application for tirzepatide for pediatric and adolescent type 2 diabetes to the U.S.Food and DrugAdministration(FDA)and European Commission(EC)for approval.Announced that a Phase 3 trial for tirzepatide for cardiovascular outcomes in type 2 diabetes met the primaryendpoint.A Phase 3 trial was initiated for tirzepatide for type 1 diabetes.Withdrew our U.S.application for tirzepatide for heart failure with preserved ejection fraction.Insulin Efsitora AlfaSubmitted our application for insulin efsitora alfa for type 2 diabetes to the FDA and EC for approval.MuvalaplinA Phase 3 trial was initiated for muvalaplin for atherosclerotic cardiovascular disease.OrforglipronAnnounced that Phase 3 trials for orforglipron for obesity met their primary and all key secondary endpoints.Announced that Phase 3 trials for orforglipron for type 2 diabetes met their primary and all key secondaryendpoints.A Phase 3 trial was initiated for orforglipron for hypertension and overweight or obesity.A Phase 3 trial was initiated for orforglipron for osteoarthritis pain of the knee and overweight or obesity.A Phase 3 trial was initiated for orforglipron for stress urinary incontinence and overweight or obesity.RetatrutideA Phase 3 trial was initiated for retatrutide for chronic low back pain and overweight or obesity.Mirikizumab(Omvoh)Japans Ministry of Health,Labour and Welfare approved mirikizumab for treatment of Crohns disease.Donanemab(Kisunla)The EC approved donanemab for the treatment of early symptomatic Alzheimers disease.Imlunestrant(Inluriyo)The FDA approved imlunestrant for treatment of ER ,HER2-,ESR1-mutated advanced or metastatic breastcancer.Pirtobrutinib(Jaypirca)The EC approved pirtobrutinib for treatment of chronic lymphocytic leukemia.Announced that Phase 3 trials for pirtobrutinib for chronic lymphocytic leukemia or small lymphocytic leukemiamet their primary endpoints.OlomorasibA Phase 3 trial was initiated for olomorasib for resected adjuvant non-small cell lung cancer.A Phase 3 trial was initiated for olomorasib for unresected adjuvant non-small cell lung cancer.The FDA granted Breakthrough Therapy designation for the treatment of certain newly diagnosed metastatic KRAS G12C-mutant lung cancers.Breakthrough Therapydesignation is designed to expedite the development and review of potential medicines that are intended to treat a serious condition when preliminary clinical evidence indicatesthat the treatment may demonstrate substantial improvement on a clinically significant endpoint(s)over already available therapies.(1)(1)35Other MattersTrends Affecting Pharmaceutical Pricing,Reimbursement,and Access and Certain Other Regulatory DevelopmentsGlobal concern over access to,and affordability of,pharmaceutical products continues to drive debate and action,as well as costcontainment efforts by governmental authorities and scrutiny of pricing and access disparities.Cost containment measures include the use ofmandated discounts,price reporting requirements,mandated reference prices,restrictive formularies,changes to available intellectualproperty protections,as well as other efforts.Reforms,initiatives,and other actions,including those that may stem from political initiatives,periods of uneven economic growth ordownturns,or as a result of inflation or deflation,trade and other global disputes and interruptions including related to tariffs,trade protectionmeasures,and similar restrictions,the emergence or escalation of,and responses to,international tension and conflicts,or governmentbudgeting priorities,are expected to continue to result in added pressure on cost,pricing,reimbursement,and access for our products.For example,in May 2025,the U.S.presidential administration issued an executive order intended,in part,to encourage or impose the useof most-favored-nation pricing to tie U.S.prescription drug prices with prices in selected comparably developed nations.In July 2025,we andother pharmaceutical companies received letters from the U.S.presidential administration reiterating certain drug pricing objectives.We andother pharmaceutical manufacturers face uncertainty on the implementation of these objectives,which could result in reduced prices andreimbursement for certain of our or competing products and may significantly impact our business and results of operations.Additionally,inJuly 2025,the OBBBA was enacted into law.In addition to tax impacts,the OBBBA implements spending cuts to certain federal healthcareprograms,including Medicaid and the Affordable Care Act.The Inflation Reduction Act of 2022(IRA)requires HHS to effectively set prices for certain single-source drugs and biologics reimbursedunder Medicare Part B and Part D.Currently,these government prices generally apply beginning at nine years(for medicines approvedunder a New Drug Application)or thirteen years(for medicines approved under a Biologics License Application)following FDA approval orlicensure for the molecule.In August 2023,HHS selected Jardiance,which is part of our collaboration with Boehringer Ingelheim,as one ofthe first ten medicines subject to government-set prices effective in 2026 and we expect additional of our significant products will be selectedin future years.The IRA has,and will continue to,meaningfully influence our business strategies and those of our competitors and couldsignificantly impact our business and consolidated results of operations.Other policies,regulations,legislation,or enforcement,including those proposed or pursued by lawmakers,regulators,and other authoritiesin the U.S.and worldwide,have and may continue to adversely impact our business and consolidated results of operations.For example,theU.S.and other countries have recently imposed or reached alignment on new tariffs.In some cases,imposed tariffs have been paused butmay come into effect quickly and unpredictably.While pharmaceuticals are exempt from certain of these tariffs,such exemptions may beterminated or may not apply to any future tariffs.The precise impact of tariffs,trade protection measures,and other restrictions depend ontheir ultimate scope,timing,and other factors.If enacted,additional restrictions could result in supply disruptions or delays,further increasecosts,or otherwise have a negative impact on our business.Given the nature of pharmaceutical regulation and commercialization,we maynot be able to share the burden of increased costs from tariffs and related impacts to any meaningful degree.Private payers and pharmacy benefit managers in the U.S.continue to significantly impact the market for pharmaceuticals throughnegotiation of access,manufacturer price or rebate concessions and pharmacy reimbursement rates.Restrictive or unfavorable pricing,coverage,or reimbursement determinations for our medicines or product candidates by governments,regulatory agencies,courts,or privateactors have and may continue to adversely impact our business and consolidated results of operations.In addition,we are engaged inlitigati
2025-10-31
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