LLY 10-Q filed 2026-10-29 | Key takeaways
LLY filed its 10-Q; the most relevant disclosure change is expanded Acquisitions: In October 2026, acquired Merida Biosciences for up to $2.9 billion inclusive of upfront and potential milestone payments; Q3 acquisitions included AtaiBeckley ($2.61B, Phase 2), Orna ($1.23B, Phase 1), Curevo ($954M, Phase 2), and Ajax ($909M, Phase 1). Nine-.
Key takeaways
Acquired IPR&D: Q3 charges of $4.2 billion included AtaiBeckley ($2.61B, Phase 2), Orna ($1.23B, Phase 1), Curevo ($954M, Phase 2), and Ajax ($909M, Phase 1); YTD charges of $7.5 billion vs $2.4 billion in prior year.
Subsequent event: In October 2026, acquired Merida Biosciences for up to $2.9 billion inclusive of upfront and milestone payments.
Asset impairment: Recognized $303 million partial impairment of intangible asset associated with molecule in development.
Share repurchases: $4.3 billion repurchased YTD under $15B program; $6.6 billion remaining.
Dividends: YTD dividends paid of $4.6 billion; Q4 dividend of $1.73/share declared payable December 10, 2026.
Pipeline: FDA approved insulin efsitora alfa and orforglipron; retatrutide Phase 3 met primary endpoints for obesity and type 2 diabetes.
Goodwill increased to $9.9 billion from $5.9 billion at December 31, 2025, driven by Kelonia, Centessa, and Ventyx acquisitions.
Key metrics
Disclosure changes
- Acquisitions
In October 2026, acquired Merida Biosciences for up to $2.9 billion inclusive of upfront and potential milestone payments; Q3 acquisitions included AtaiBeckley ($2.61B, Phase 2), Orna ($1.23B, Phase 1), Curevo ($954M, Phase 2), and Ajax ($909M, Phase 1). Nine-month acquisitions included Kelonia, Centessa, and Ventyx as business combinations.
Significant M&A activity continues to reshape pipeline and create goodwill; IPR&D charges of $7.5B YTD vs $2.4B prior year. - Asset impairment
Recognized $303M partial impairment of intangible asset associated with a molecule in development; YTD impairment charges of $1.3B included this and acquisition/integration costs and litigation matters.
First indication of intangible asset impairment related to development-stage molecule. - Contingent consideration
Contingent consideration liabilities increased to $2.9B ($818M current, $2.07B noncurrent) from $251M at December 31, 2025, primarily due to Kelonia acquisition.
Material increase in contingent consideration from acquisition of Kelonia; represents maximum potential milestone payments. - Goodwill and intangibles
Goodwill increased to $9.9B from $5.9B; Other intangibles increased to $18.1B from $6.5B, both driven by acquisitions including Kelonia, Centessa, and Ventyx.
Material goodwill and intangible asset buildup from M&A activity; final valuations pending. - Foundayo launch
FDA approved orforglipron (Foundayo) for obesity; launched in Q2 2026 in U.S.; submitted for type 2 diabetes in U.S. and Japan; CHMP issued positive opinion for obesity and type 2 diabetes in EU.
New product launch contributing to revenue growth in cardiometabolic franchise. - Patent litigation
Emgality: Federal Circuit reversed trial court, found patents not invalid, remanded case in April 2026; September 2026 denied rehearing en banc; charge recognized in Q1 2026. Verzenio: Cipla filed ANDA April 2026; Lilly filed infringement suit June 2026; trial scheduled May 2028. Tirzepatide: Multiple generic companies filed ANDAs July 2026; Lilly filed infringement suits August 2026.
Multiple patent challenges across key products; Emgality outcome adverse to Lilly.
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