---
title: "Lilly spent $18.2 billion on its next franchise. Its own filing lists what failed."
description: "Eli Lilly's third-quarter filing both raises guidance to $91-92 billion and lists the experimental drugs it killed, including its phase 2 Alzheimer's candidate mevidalen. With $18.2 billion spent on acquisitions in nine months and December 7's Innovation event ahead, the pipeline table is the document that prices the stock at 34 times earnings."
publisher: "The Inference"
section: "Health"
published: 2026-11-04T15:19:20.121Z
modified: 2026-11-04T15:19:20.121Z
canonical: https://theinference.org/article/lilly-spent-18-2-billion-on-its-next-franchise-its-own-filing-lists-what-failed
language: en
keywords: "Eli Lilly, Pharma, Earnings, Drug Development, M&A"
---

# Lilly spent $18.2 billion on its next franchise. Its own filing lists what failed.

> Eli Lilly's third-quarter filing both raises guidance to $91-92 billion and lists the experimental drugs it killed, including its phase 2 Alzheimer's candidate mevidalen. With $18.2 billion spent on acquisitions in nine months and December 7's Innovation event ahead, the pipeline table is the document that prices the stock at 34 times earnings.

## Mevidalen did not clear the bar

Mevidalen, an experimental Alzheimer's drug [Eli Lilly](https://theinference.org/markets/companies/eli-lilly) had been testing in 304 patients with mild-to-moderate disease dementia, is out [1][3]. The company's [third-quarter filing](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000059478) lists it as "removed from pipeline," and [a Lilly spokesperson told Fierce Biotech the program "did not meet our high internal bar for success"](https://www.fiercebiotech.com/biotech/lilly-scraps-ph-2-alzheimers-disease-drug-it-did-not-meet-high-internal-bar) [1][3]. It is the drug's second strike: in 2021 it missed its primary and secondary cognitive endpoints in a phase 2 trial in Lewy body dementia [3].

Almost nobody outside the industry press noticed, and that is the point. The same filing carries the price of everything Lilly bought to replace drugs like it.

## The engine paying for the rebuild

The quarter itself was enormous. Revenue hit $24.4 billion, up 39% from a year earlier, on volume growth of 53% that outran a 15% slide in realized prices, and Lilly [raised full-year revenue guidance to $91 to $92 billion from $85 to $87 billion](https://www.biospace.com/press-releases/lilly-reports-third-quarter-2026-financial-results-raises-full-year-guidance-and-highlights-regulatory-progress-across-the-portfolio) [1][2].

[The stock touched a record high on October 30](https://theinference.org/article/eli-lilly-hits-a-record-high-one-week-before-the-quarter-that-tests-ricks-s-volume-bet) and now sits near $1.1 trillion, at about 34 times forward earnings against a five-year average of 40 [4]. But tirzepatide, the molecule behind Mounjaro and Zepbound, made 65% of first-half revenue, and generic makers filed to sell copies of both drugs in July [1][4].

## Buying the next franchise three ways

So Lilly is buying a second franchise. Per the quarterly filing, [it paid $18.2 billion in cash on business development in the first nine months of 2026](https://finance.yahoo.com/healthcare/articles/lilly-r-d-whirlwind-large-134825534.html), taking in AtaiBeckley, Orna Therapeutics and Centessa Pharmaceuticals [1]. Fierce Biotech counts $6.3 billion upfront for Centessa in June and $2.8 billion upfront for AtaiBeckley, closed in September [3]. Merida Biosciences closed in October for up to $2.87 billion in upfront and milestone payments [1].

*Chart: **The three deals disclosed so far account for $11.9 billion of the $18.2 billion** Bar chart of the disclosed upfront prices of Eli Lilly's 2026 acquisitions: Centessa Pharmaceuticals at $6.3 billion, AtaiBeckley at $2.8 billion and Merida Biosciences at up to $2.87 billion.*

*Disclosed deal prices in billions of dollars. Centessa and AtaiBeckley are upfront amounts per Fierce Biotech; Merida's figure is up to $2.87 billion in upfront and milestone payments, shown as an estimate. Total first-nine-month business development spend per Lilly's filing: $18.2 billion. Sources: Eli Lilly filing via PharmaVoice; Fierce Biotech. [1][3]*

The fees Lilly pays AI labs for discovery tools sit outside that line and are undisclosed; neither Lilly nor [Novo Nordisk](https://theinference.org/markets/companies/novo-nordisk) has an approved AI-designed drug, as The Inference reported on November 3 [1]. Meanwhile Lilly has stopped disclosing its phase 1 programs, so the public record of failures starts only where the filing chooses to list them [1].

## What the filing says failed

The removals run across four fields: mevidalen in Alzheimer's, the anti-CD19 antibody LY3541860 stopped in multiple sclerosis and rheumatoid arthritis, the early obesity candidate LY4064912 terminated after a small phase 1 trial, and gene therapies LY3884963 and LY3884961 dropped [1]. Industry data quoted in the same report puts clinical development disruptions at 43% for cell and gene therapy programs against 29% for monoclonal antibodies, with 17% of those disruptions efficacy-related [1]. The heaviest buying, in other words, is flowing into the hardest science.

*Chart: **Quarterly revenue has doubled in two years, and tirzepatide is still two-thirds of it** Column chart of Eli Lilly's quarterly revenue from Q2 2024 through Q3 2026, rising from $11.3 billion to $24.4 billion, with the Q3 2026 bar highlighted.*

*Quarterly revenue in billions of dollars, Q2 2024 through Q3 2026; Q3 2026 highlighted. Source: Eli Lilly quarterly figures from its SEC filings. [7]*

## The bulls have a case

RBC Capital Markets raised its 2026 revenue forecast to $91.2 billion this week and called itself "bullish heading into" Lilly's Innovation event on December 7 [1]. Lilly's Key Products in immunology, oncology and neuroscience doubled year over year in the quarter [2].

Rival Novo Nordisk [reported the same week](https://finance.yahoo.com/healthcare/articles/novo-raises-full-outlook-continued-063000545.html) that its reported operating profit fell 9% at constant currency on DKK 8.7 billion of impairments, including DKK 4.6 billion against the kidney drug ziltivekimab [5]. Setbacks are the cost of running a portfolio, and Lilly is paying for its pipeline with a quarter most large pharma would call a career.

## The December 7 test

At its Innovation event on December 7, Lilly management sets long-term margin and spending targets, one week after Novo wrote off DKK 8.7 billion, and with one new global commercial chief, [Ilya Yuffa](https://theinference.org/markets/people/ilya-yuffa), seated from January 1 to sell whatever the pipeline produces [5][6]. An investor paying 34 times earnings is buying the disclosed record, not the pitch: $18.2 billion in, a removal table out [5][6]. Judge the December targets on the table.

## Takeaway

Lilly's raised guidance and record stock ride on a molecule that is 65% of revenue, while its own filing quietly lists the experimental drugs it dropped; the $18.2 billion it spent on acquisitions is the bet that the next franchise is already bought, and December 7's targets are where that bet gets judged.

## Sources

1. [PharmaVoice via Yahoo Finance, Lilly's R&D whirlwind, what the large pharma has taken in and what it's dropped, 3 November 2026](https://finance.yahoo.com/healthcare/articles/lilly-r-d-whirlwind-large-134825534.html)
2. [Eli Lilly and Company press release via BioSpace, Lilly reports third-quarter 2026 financial results, raises full-year guidance, 29 October 2026](https://www.biospace.com/press-releases/lilly-reports-third-quarter-2026-financial-results-raises-full-year-guidance-and-highlights-regulatory-progress-across-the-portfolio)
3. [Fierce Biotech, Lilly scraps phase 2 Alzheimer's program after drug falls short of expectations, 29 October 2026](https://www.fiercebiotech.com/biotech/lilly-scraps-ph-2-alzheimers-disease-drug-it-did-not-meet-high-internal-bar)
4. [Yahoo Finance/TIKR, Forget Nvidia: Eli Lilly will become the most valuable company in the world, says macro investor, 3 November 2026](https://finance.yahoo.com/healthcare/articles/forget-nvidia-eli-lilly-become-171719731.html)
5. [Novo Nordisk A/S press release via Yahoo Finance, Financial report for the period 1 January 2026 to 30 September 2026, 4 November 2026](https://finance.yahoo.com/healthcare/articles/novo-raises-full-outlook-continued-063000545.html)
6. [Indianapolis Business Journal, Lilly combines U.S. and international commercial divisions, 3 November 2026](https://www.ibj.com/articles/lilly-combines-u-s-international-commercial-divisions)
7. [Eli Lilly, quarterly figures from its SEC filings, retrieved 4 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000059478)


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Lilly spent $18.2 billion on its next franchise. Its own filing lists what failed. — The Inference. Canonical: https://theinference.org/article/lilly-spent-18-2-billion-on-its-next-franchise-its-own-filing-lists-what-failed