StockWatch: Lilly Rises on Revenue Leap; Analysts High on Krystal Despite Revenue Miss

Like Ol’ Man River of song, Eli Lilly (NYSE: LLY) keeps rollin’ along thanks to its ongoing windfall of cash from tirzepatide, which is marketed for obesity as Zepbound® and for adult type 2 diabetes as Mounjaro^®.

That windfall for tirzepatide, a dual agonist of glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP), continued when the pharma giant reported second-quarter revenue and other results that beat analyst forecasts.

Lilly shares jumped 6.9% this past week, from $1,115.68 on August 4 to $1,192.28 on Thursday, before profit-taking trimmed the share price to $1,185.71 at Friday’s closing bell and a 6.3% one-week gain. The mini-surge followed Lilly releasing powerhouse Q2 earnings results in which it raised its investor guidance for 2026 GAAP revenue.

Lilly now expects to rack up between $85 billion and $87 billion in revenue this year, up 2.4% to 3.7% from its previous range of between $82 billion and $85 billion. That change raised the midpoint of Lilly’s revenue forecast from $85.5 billion to $86 billion.

However, Lilly also lowered its high-end EPS guidance by 1.4% from $37 to $36.50 per share, though the company kept the low end of its forecast flat at $35.50. Lilly blamed the guidance dip on the $2.8 billion ($3.03 per share) in acquired in-process research and development (IPR&D) charges it incurred from business development activity—primarily related to Lilly’s $2.4 billion acquisition of Orna Therapeutics, a circular RNA therapy developer, and up-to-$2.3 billion buyout of JAK2 inhibitor developer Ajax Therapeutics, both completed during Q2.

Lilly finished the second quarter with $7.095 billion in net income, up 25% from $5.661 billion in Q2 2025, on revenue that leaped 48%, to $22.974 from $15.558. EPS grew 26% year-over-year to $7.94 from $6.29. Lilly’s EPS was 25% above, and its revenue 11% above, consensus forecasts cited by Leerink Partners.

Exceeding expectations

“LLY significantly exceeded 2Q consensus expectations, and the income statement shows the tremendous operating leverage as sales upside drives much higher margins and profits,” David Risinger, a senior managing director and senior research analyst covering diversified biopharmaceuticals at Leerink Partners, commented in a research note.

Risinger raised Leerink’s 12-month price target on Lilly shares 6%, from $1,232 to $1,309. Both numbers are 25 times Lilly’s estimated adjusted earnings per share for 2027, which Leerink now predicts will rise from $49.28 to $52.34. Similarly, Lilly raised its EPS forecast for 2026 by 7%, from $33.87 to $36.20.

Lilly’s above-forecast revenue, according to Risinger, was largely driven by sales of adult type 2 diabetes drug Mounjaro outside the United States ($5.162 billion), which grew about 14% above consensus forecasts, as well as U.S. sales of Mounjaro ($4.791 billion), which rose about 10% above consensus. Overall, Mounjaro quarterly revenues nearly doubled, catapulting 91% to $9.943 billion from $5.199 billion in Q2 2025.

Another GLP-1/GIP dual inhibitor proved to be a growth driver for Lilly during Q2—Zepbound, the obesity drug whose revenues vaulted 46% to $4.928 billion from $3.381 billion in April–June of last year.

Again in Q2, Lilly outperformed the GLP-1 inhibitor blockbuster drugs of Novo Nordisk (shares traded on Nasdaq Copenhagen as NOVO-B; American depositary receipts or ADRs traded on NYSE as NVO), which reported quarterly results on Tuesday.

Novo Nordisk’s adult type 2 diabetes drug Ozempic® garnered DKK 31.375 billion ($4.851 billion), up 5% year over year, while its injectable Wegovy® obesity/weight control drug generated sales of DKK 19.484 billion ($3.013 billion), up just 1% from Q2 2025. The company also made DKK 3.218 billion (about $498 million) in sales from oral Wegovy, which reached the U.S. market on January 5.

Lilly’s competing oral obesity drug Foundayo® (orforglipron), a small molecule GLP-1 receptor agonist, generated $98 million in its first quarter on the market, having won FDA approval on April 1. That’s about $3 million below consensus forecasts cited by Jefferies.

“LLY continues to be one of our top picks in LC pharma,” Jefferies equity analyst Akash Tewari wrote in a research note, referring to “large cap” pharmas with $10 billion or more of market capitalization (share price times the number of outstanding shares). “While Foundayo’s initial U.S. launch has been muted, we think investor focus will shift toward whether LLY’s GLP-1/obesity franchise as a whole (including Foundayo) can beat expectations in ’26.”

Tewari offered two other arguments for finding Lilly a top pick among the largest biopharmas: The huge potential for obesity drug sales outside the U.S. and through the Medicare GLP-1 Bridge Program, a temporary program ending December 31, 2027, that includes Zepbound (KwikPen® pre-filled injection version), Foundayo, and Novo Nordisk’s Wegovy. Medicare GLP-1 Bridge Program participants pay a fixed $50 monthly copayment.

How much higher can Lilly climb? The sky’s the limit, chairman and CEO David A. Ricks suggested in a statement. He cited Lilly’s Phase III next-generation obesity blockbuster retatrutide, a triple hormone receptor agonist targeting glucagon receptors as well as GLP-1 and GIP; as well as Lilly’s ongoing U.S. manufacturing expansion totaling $55 billion in projects since 2020.

Driving those projects is the company’s need for more manufacturing—and a desire, as with most biopharma giants, to avoid tariffs levied by the administration of Donald J. Trump on imports of drugs produced outside the United States.

“Lilly is building for the future,” Ricks declared. “With our next-generation weight-loss medicine retatrutide and its complete clinical data package in hand, new manufacturing capacity coming online, and exciting new assets entering our pipeline through business development, Lilly’s future, after 150 years, has never been brighter.”

Krystal shines for analysts

Krystal Biotech (Nasdaq: KRYS) shares endured an 11% one-week slump after the genetic medicine developer reported second quarter results that included less revenue than market watchers expected for Vyjuvek^® (beremagene geperpavec-svdt or B-VEC), the company’s marketed gene therapy for the rare skin disorder dystrophic epidermolysis bullosa or DEB.

Vyjuvek finished Q2 with $119.222 million in net product revenue, 0.7% to 1.4% below consensus analyst forecasts that projected between $120.1 million and $120.9 million in quarterly revenue—though 24% above the $96.042 million reported for the year-ago quarter.

Despite the slight revenue miss vs. forecasts, Krystal enjoyed positive feedback from analysts that stemmed the stock slide enough for Krystal shares to plateau the rest of the week.

They began by attributing the lower-than-expected revenue to the fact that Q2 was the first full quarter of price accruals for Vyjuvek in Germany—the recording of expenses that Krystal has incurred but not yet been paid for, since the gene therapy is the subject of pricing and reimbursement talks with German officials. That helped flatten European sales to $19.3 million, compared with $91.6 million in the United States (the remaining $8.3 million in sales was generated in Japan).

However, analysts noted, patient vial growth in Europe and Japan was at double-digit levels with more than 180 patients treated outside the United States, Krystal said.

In the United States, Krystal secured over 730 Vyjuvek-related reimbursement approvals as of Q2, up 35 from the first quarter. As a result, penetration of the gene therapy had risen to more than 60% of patients diagnosed with DEB.

Over the past year, Vyjuvek has added 35–40 U.S. patients quarter over quarter, Jefferies equity analyst Roger Song, MD, wrote in a research note.

“Demand remains robust”

“Despite a modest rev[enue] miss driven primarily by German pricing accrual dynamics, underlying Vyjuvek demand remains robust across U.S. and ex-U.S.,” Song wrote. “Ex-U.S. launches are tracking favorably despite expected reimbursement-related volatility, [while] expansion of global footprint carries on.”

Sami Corwin, PhD, a biotechnology-focused healthcare analyst with William Blair, observed in a research note that in the United States, Vyjuvek has attracted more than 640 unique prescribers since its launch in 2023, with 70 new prescribers in the second quarter alone—progress that she said highlighted the impact of Krystal’s expanded sales force.

As for Germany, Corwin reported Krystal’s expectation that pricing talks will conclude by year’s end, to be followed in the second half of 2027 by the conclusion of pricing talks with officials in France. Similar negotiations are in progress in Spain and Italy, with commercial launches also expected there by the end of 2026.

“We continue to believe that the ex-U.S. launches will be key near-term drivers of Vyjuvek revenue growth in 2026, and the continued positive patient experience will contribute to a strong revenue tail,” Corwin wrote.

Krystal’s stock drop began with profit-taking by investors that sent Krystal’s shares sliding 7% from $366.85 to $341.12 on July 31. After dropping another 8% to $312.57 on August 3, Krystal shares bounced back 3% to $322.69 Thursday and finished the week rising another 1%, closing at $326.45 on Friday.

Leaders and laggards

• Emergent BioSolutions (NYSE: EBS) shares tumbled nearly 30% Thursday from $7.54 to $5.31 after the developer of medical countermeasures (MCMs) announced a restructuring that included eliminating approximately 93 positions—about 10% of Emergent’s approximately 900-person workforce as of December 31, 2025—as well as eliminating about 21 vacant positions and shutting down its wet labs in Gaithersburg, MD, where the company is based. The restructuring is projected to achieve annualized savings of approximately $40 million. Emergent finished the second quarter with a net loss of $180.2 million, 1,402% worse than the year-ago quarter, largely due to a $191.3 million non-cash impairment charge related to Narcan® Nasal Spray assets. Narcan is among Naloxone products whose revenues fell $15.1 million, or 22%, compared with Q2 2025, as over-the-counter Narcan saw decreases in U.S. sales volumes. Revenue zoomed 66% from Q2 2025 to $234.3 million, primarily due to a 150% year-over-year jump in smallpox MCM revenue, from $40.6 million to $101.6 million.
• Iovance Biotherapeutics (Nasdaq: IOVA) shares surged 43% from $4.34 to $6.21 Thursday after the developer of polyclonal tumor-infiltrating lymphocyte (TIL) cancer therapies said it will review its revenue guidance to investors after reporting second quarter results that included a record for quarterly revenue of $99.313 million. Nearly all of that revenue consisted of the ~$91 million generated by Iovance’s tumor-derived autologous T cell immunotherapy Amtagvi® (lifileucel), the company’s sole marketed product. Amtagvi revenue jumped 40% year-over-year while total revenue leaped ~60% from $59.952 million in Q2 2025. Amtagvi is indicated for adults with unresectable or metastatic melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without a MEK inhibitor. Iovance previously guided investors to 2026 revenue of between $350 million and $370 million.