Lilly's Incretin Dominance Trumps Merck's KEYTRUDA Cliff

Eli Lilly and Merck are two pharmaceutical companies that have recently reported their second-quarter results. While both companies are in the same sector, they have different setups heading into 2030.

Lilly's revenue surged 47.7% to $22.97 billion, driven by the success of its incretin franchise, particularly Mounjaro and Zepbound. CEO Dave Ricks stated that Lilly's momentum continues as it delivered 48% revenue growth and raised its full-year guidance.

Merck's revenue, on the other hand, grew just 5% to $16.6 billion, with KEYTRUDA being the main growth engine. However, management admitted that U.S. KEYTRUDA growth will moderate as the drug reaches peak penetration.

Lilly is focusing on scaling its supply and layering assets onto a franchise that already works, while Merck is diversifying beyond one drug and rebuilding around a patent cliff. Lilly's setup favors it for durable growth, with a raised FY2026 guide of $85 to $87 billion in revenue and an 85.8% gross margin.