Eli Lilly (LLY) said on Oct. 19, 2026 that its immune drug Omvoh (mirikizumab-mrkz) met its primary goal of clinical remission in a year-long Phase 3 trial in children with ulcerative colitis, according to the company's release. Lilly said it is the first drug of its class, an IL-23p19 inhibitor, to report year-long Phase 3 results in children with the condition. It matters as an example of "label expansion," but immunology is a small part of Lilly's business: it brought in $1.42B of the $22.97B in revenue in the quarter ended June 30, 2026.
Key facts
- Oct. 19, 2026: Lilly said Omvoh met its primary endpoint (clinical remission) in a pediatric ulcerative colitis Phase 3 study, per its release.
- Oct. 19, 2026: LLY shares traded at a latest quote of $1,240.34, down 1.33%. The 52-week range is $793.82 to $1,292.65. Market cap is about $1.17T.
- Quarter ended June 30, 2026 (Q2 FY2026): Revenue was $22.97B, up 47.7% from $15.56B a year earlier. Net income was $7.09B, up 25.3%.
- Q2 FY2026: Free cash flow (cash left after running costs and investment in plants and equipment) was $7.76B.
- Oct. 29, 2026: Next earnings report. Analysts expect EPS of 5.65 and revenue of $22.47B.
What happened
The theme: label expansion. A drug is first approved for one group of patients, usually adults. The maker then tests it in other groups, such as children, or for other diseases. Each new group is another "label" the drug can be marketed for. This is generally cheaper and less risky than inventing a new drug, because safety and manufacturing are already understood. It can also lengthen the useful life of a product.
The example: Omvoh in children. Ulcerative colitis is a long-term inflammatory disease of the large intestine. Omvoh blocks a protein signal called IL-23p19 that drives inflammation. Lilly said the pediatric study reached its main goal, clinical remission, meaning the disease's symptoms were controlled to a level the trial defined as remission. Lilly also said no other drug in this class has reported year-long Phase 3 data in children with the condition.
What this does not mean: a positive trial is not an approval. Regulators still have to review the data, and the release does not change Lilly's financial results. Press coverage on Oct. 19 described the news as a step toward expanding the drug's use in children. We would treat it as a modest, incremental development.
Scale check. In the quarter ended June 30, 2026, immunology revenue was $1.42B, Cardiometabolic Health (diabetes, obesity and related drugs) was $18.35B, Oncology was $2.57B and Neuroscience was $429.0M. For reference, our data provider lists Q1 FY2025 (quarter ended March 31, 2025) segment figures: Immunology $1.09B, Cardiometabolic Health $9.21B, Oncology $1.95B, Neuroscience $272.1M and Other $212.9M. That is not a same-quarter comparison, so it does not show year-over-year segment growth. Cardiometabolic Health made up most of the latest quarter's revenue, so Omvoh's pediatric news is not what moves Lilly's numbers.
By region, the United States generated $14.41B, Europe $4.12B, non-US (other) $2.88B, China $941.0M and Japan $628.0M.
Why it matters for investors
Why the quarter was so strong. The segment data points to the cardiometabolic franchise as the driver. Lilly's Q2 FY2026 report on Aug. 5, 2026 beat expectations: EPS of 8.38 against an estimate of 6.4, and revenue of $22.97B against $20.82B. (The filing shows diluted EPS of 7.94, which differs from the 8.38 figure compared with the estimate, so check which measure you are looking at.) We do not have the earnings call transcript in our data, so we are not quoting management on the drivers.
Five-quarter trend.
- Revenue: $15.56B (Q2 FY2025), $17.60B, $19.29B, $19.80B, then $22.97B (Q2 FY2026). It rose in every quarter, with the biggest step in the latest one.
- Operating margin (share of revenue left after operating costs): 45.1%, 47.6%, 46.6%, 49.4%, then 54.2%. Gross margin dipped from 84.3% to 81.9% before recovering to 85.8%.
- Free cash flow: $1.28B, $8.61B, $677.9M, $3.01B, then $7.76B. This line is uneven. Plant spending swings from quarter to quarter, from $223.9M in Q3 FY2025 to $2.93B in Q2 FY2026. Judge it over several quarters, not one.
- Shareholder payouts: In Q2 FY2026 Lilly spent $1.60B on buybacks and $1.55B on dividends.
Valuation versus peers (trailing 12 months). LLY trades at a price-to-earnings ratio (share price divided by yearly earnings) of 41.50, with a net margin (profit as a share of sales) of 33.5%.
| Company | P/E | Net margin | |---|---|---| | Eli Lilly (LLY) | 41.50 | 33.5% | | AbbVie (ABBV) | 79.67 | 9.8% | | Johnson & Johnson (JNJ) | 38.48 | 16.2% | | Amgen (AMGN) | 26.20 | 22.9% | | AstraZeneca (AZN) | 24.84 | 17.0% |
Lilly's profit margin is the highest in this group. Its P/E is above Amgen, AstraZeneca and J&J but below AbbVie. Other LLY measures are also high: price-to-sales is 14.66, price-to-free-cash-flow is 58.22 and EV/EBITDA (a company-value-to-operating-profit ratio) is 28.03. The dividend yield is 0.5%.
Analysts. Of 45 ratings, 33 are Buy, 9 are Hold and 3 are Sell, for a consensus of "Buy." Analyst price targets average $1,345.80, with a median of $1,376.00, a high of $1,500.00 and a low of $940.00. The latest quote of $1,240.34 is below the average target, but targets are opinions and often miss. Recent rating actions, including RBC Capital on Oct. 12 and Morgan Stanley on Oct. 7, were all maintained ratings. For the quarter ending March 30, 2027, analysts expect revenue of $22.82B and EPS of 10.08. For the quarter ending June 30, 2027, they expect revenue of $25.58B and EPS of 11.69.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 for LLY is 98 (Exceptional). The sector-relative pillars: growth 100, quality 98, momentum 92, safety 69 and valuation 36. Growth, quality and momentum are strong. Safety is middling and valuation is the weak spot, which fits the multiples above.
What could go wrong.
- Valuation: A valuation score of 36 means the stock is priced richly compared with its sector. A financial-model estimate from FMP puts fair value at $674.37 per share, well below the market price. This is a model output that depends on its assumptions, not a forecast, but it shows how much growth is already expected.
- Concentration: Most revenue comes from one segment, Cardiometabolic Health. Any slowdown in demand, pricing pressure or competition there would affect the whole company.
- Debt: Total debt was $54.91B against cash and short-term investments of $8.95B at June 30, 2026, leaving net debt of $46.02B. Debt-to-equity is 1.62. Financial-strength scores are solid (Piotroski 8 out of 9, Altman Z 8.52), so this is manageable, but it is real.
- Insiders: Among recent filings in the last 90 days, we found 0 open-market purchases and 3 sales. Insider sales are common at large companies and not a signal on their own.
- Expectations: The latest quote on Oct. 19 was down 1.33%, and the stock sits below its 52-week high of $1,292.65. Big beats raise the bar for the next report.
What to watch next
- Oct. 29, 2026 earnings: Compare revenue with the $22.47B estimate, and see whether the margin gains from Q2 FY2026 hold.
- Segment mix: Watch whether Immunology and Oncology grow alongside Cardiometabolic Health, which would reduce reliance on one franchise.
- Cash flow: See whether free cash flow stays strong as plant spending continues.
- Omvoh regulatory steps: Look for further detail on the pediatric data, such as presentation at a medical meeting and any regulatory filing.
- Balance sheet: Track net debt against the $46.02B reported at June 30, 2026.
Frequently asked questions
Q: What did Eli Lilly announce about Omvoh on Oct. 19, 2026?
Lilly said Omvoh (mirikizumab-mrkz) met its primary endpoint of clinical remission in a year-long Phase 3 trial in children with ulcerative colitis. The company said it is the first IL-23p19 inhibitor to report year-long Phase 3 results in this group. It is a trial result, not a regulatory approval.
Q: Will the Omvoh pediatric news change Lilly's earnings?
Not meaningfully in the near term. Immunology revenue was $1.42B in the quarter ended June 30, 2026, against total revenue of $22.97B, and Lilly's release does not change its financial results. The next earnings report is due Oct. 29, 2026.
Q: Is Eli Lilly stock expensive compared with other big drugmakers?
By some measures, yes. LLY's trailing P/E is 41.50, above Amgen (26.20), AstraZeneca (24.84) and Johnson & Johnson (38.48), and below AbbVie (79.67). Lilly's net margin of 33.5% is higher than all four. Our MoonshotScore valuation pillar is 36, which signals a rich price, while growth (100) and quality (98) score very high. This is information, not advice, and each investor should weigh it against their own goals.
This is educational content, not investment advice. Past performance does not guarantee future results.