LLY 10-Q filed 2026-08-05 | Key takeaways
LLY filed its 10-Q; the most relevant disclosure change is expanded Business combinations: Q2 2026 Note 4 now summarizes three business combinations — Kelonia (June 25, 2026; cash $3,086M, contingent $3,750M), Centessa (June 24, 2026; cash $5,958M, contingent $1,542M), and Ventyx (March 4, 2026; cash $1,058M) — versus Q1 2026 which only disclosed th.
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Disclosure changes
- Business combinations
Q2 2026 Note 4 now summarizes three business combinations — Kelonia (June 25, 2026; cash $3,086M, contingent $3,750M), Centessa (June 24, 2026; cash $5,958M, contingent $1,542M), and Ventyx (March 4, 2026; cash $1,058M) — versus Q1 2026 which only disclosed the Ventyx acquisition in progress.
Material new business development activity expanding the pipeline in CAR-T (Kelonia) and sleep-wake disorders (Centessa), each with significant contingent consideration tied to milestones. - Long-term debt issuance
Note 8 discloses that in May 2026 Lilly issued $9.0 billion of long-term debt with maturities 2028–2066 and stated interest rates of 4.150%–5.700%, including $1.3 billion of floating-rate notes; net proceeds were used for general corporate purposes, repayment of commercial paper, and funding a portion of upfront cash consideration for the Centessa and Kelonia acquisitions.
Significantly increased total debt to $54.9 billion at June 30, 2026 from $42.5 billion at December 31, 2025. - Subsequent events — acquisitions
Q2 2026 Note 4 discloses a July 2026 acquisition of three companies to build an infectious disease portfolio for up to $3.9 billion in aggregate (upfront plus milestones); ~$2.0 billion was paid in July 2026 and Lilly entered an agreement to acquire AtaiBeckley Inc. for approximately $2.8 billion subject to closing conditions.
Discloses new material business development activity post-quarter-end and a pending acquisition of approximately $2.8 billion. - Patent litigation — Emgality
Q2 2026 Note 9 updates the Emgality patent litigation: in April 2026, the U.S. Court of Appeals for the Federal Circuit reversed the trial court's finding that the Teva patents are invalid and remanded; in June 2026, Lilly filed a petition for rehearing en banc.
Adds an additional procedural step and signals continuing exposure on Emgality intellectual property. - Patent litigation — Verzenio Hatch-Waxman
Q2 2026 Note 9 discloses new Hatch-Waxman litigation: in April 2026 Cipla Ltd. filed an ANDA seeking approval for a generic version of Verzenio before expiration of the listed compound patent; in June 2026 Lilly filed a patent infringement action against Cipla Ltd. and Cipla USA Inc. in the U.S. District Court for the District of Delaware.
Adds new generic competition risk to the Verzenio franchise. - Patent litigation — Tirzepatide Hatch-Waxman
Q2 2026 Note 9 discloses new Hatch-Waxman litigation: in July 2026 Lilly received notice that multiple generic companies filed ANDAs seeking approval to market generic versions of Mounjaro and/or Zepbound before expiration of some or all listed patents; Lilly intends to file suit for patent infringement.
Adds new generic competition risk to Lilly's largest growth franchise (Mounjaro/Zepbound).
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