# Eli Lilly and Company (LLY) — Narrative, FY26Q1 Sources: Annual Report on Form 10-K for the year ended December 31, 2025 (filed February 12, 2026, accession 0000059478-26-000013); Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (filed April 30, 2026, accession 0000059478-26-000045); Current Reports on Form 8-K as noted. --- ## Business *From the FY2025 10-K, accession 0000059478-26-000013.* Eli Lilly and Company was incorporated in 1901 in Indiana, succeeding the drug manufacturing business founded in Indianapolis in 1876. It discovers, develops, manufactures, and markets human pharmaceutical products and reports as **a single business segment**. Products are sold in approximately 90 countries; manufacturing and distribution run through facilities in the U.S. (including Puerto Rico), Europe, and Asia. At the end of 2025 Lilly employed approximately 50,000 people, roughly 27,000 outside the U.S., including approximately 12,000 in research and development. **Product portfolio by therapeutic area.** - **Cardiometabolic health** — Mounjaro (tirzepatide, GIP/GLP-1 receptor agonist, type 2 diabetes); Zepbound (tirzepatide for obesity/overweight and moderate-to-severe obstructive sleep apnea in adults with obesity; marketed under Mounjaro for these indications in various markets outside the U.S.); Trulicity; Jardiance (with Boehringer Ingelheim; includes Glyxambi, Synjardy, Trijardy XR); Basaglar; the Humalog and Humulin insulin families. - **Oncology** — Verzenio, Jaypirca, Retevmo, Inluriyo, Cyramza, Erbitux, Tyvyt (with Innovent Biologics, in China). - **Immunology** — Taltz, Omvoh, Olumiant (with Incyte), Ebglyss (with Almirall in Europe). - **Neuroscience** — Kisunla (donanemab, early symptomatic Alzheimer's disease), Emgality. **How it makes money.** Most U.S. product is distributed through wholesalers; in 2025, 2024, and 2023 three U.S. wholesalers — McKesson, Cencora, and Cardinal Health — each accounted for a significant percentage of consolidated revenue, and no other customer exceeded 10 percent. Arrangements with health plans, pharmacy benefit managers, employers, managed care organizations, and government purchasers typically carry discounts or rebates. Lilly also operates **LillyDirect**, a direct-to-patient digital platform through which select medicines are dispensed by third-party pharmacies; sales through LillyDirect were a growing portion of the business in 2025. Outside the U.S., Lilly maintains its own sales organizations in many countries and also uses third-party distribution and promotion arrangements. Collaboration and other revenue includes Lilly's share of the Boehringer Ingelheim Jardiance economics, royalties, and upfront and milestone payments. **Competition.** Products compete globally on effectiveness, safety, ease of use, formulary placement and payer coverage, price and demonstrated cost-effectiveness, and speed of regulatory approval and market entry. Management flags **intensifying competition from China and other markets** whose R&D capabilities have expanded rapidly and whose companies increasingly license into multinationals or compete directly. Barriers to reimbursable access matter: U.S. self-insured employers generally must opt in to cover anti-obesity medicines, and payers in various international markets do not cover them for weight loss at all — a direct constraint on volumes given the weight of anti-obesity medicines in revenue. Generics and biosimilars are the structural threat; when a branded non-biologic loses exclusivity it normally loses a large share of revenue very quickly. Lilly also cites continued production and sale of counterfeit, misbranded, adulterated, and mass-compounded incretins. **Intellectual property.** Estimated expiries for major marketed products (compound patent unless noted): | Product | Territory | Estimated expiry | |---|---|---| | Mounjaro / Zepbound | U.S. | 2036 (data protection 2027) | | Mounjaro / Zepbound | Major European countries | 2037 (data protection 2033) | | Mounjaro / Zepbound | Japan | 2040 (data protection 2030) | | Trulicity | U.S. | 2027 (biologics data protection 2027) | | Jardiance | U.S. / Europe | 2029; Japan 2030 | | Verzenio | U.S. | 2031; major European countries 2033 | | Jaypirca | U.S. | 2037; Europe 2038; Japan 2040 | | Retevmo | U.S. | 2038; Europe 2037; Japan 2038 | | Inluriyo | U.S. / Europe / Japan | 2039 | | Cyramza | U.S. | 2026 | Lilly notes that patents on major products, including biologics, will continue to be routinely challenged — via Hatch-Waxman ANDA filings, the BPCIA pathway, and inter partes review at the USPTO — and may not be upheld. Trulicity loses significant patent and remaining data protections in the next few years. **Pipeline (status as of the 10-K filing).** Selected programs: - *Cardiometabolic:* **orforglipron** (oral GLP-1) submitted in the U.S., EU, and Japan for obesity, and in the EU for type 2 diabetes; granted an FDA Commissioner's National Priority Voucher. **Insulin efsitora alfa** submitted in the U.S., EU, and Japan for type 2 diabetes. Tirzepatide approved in the EU for HFpEF and in the U.S./EU for pediatric and adolescent type 2 diabetes, submitted in the U.S. for cardiovascular outcomes, and in Phase 3 for MASLD, obesity morbidity/mortality, and type 1 diabetes. **Retatrutide** in Phase 3 across obesity/OA/OSA (met all primary and key secondary endpoints in one trial), type 2 diabetes, CV/renal outcomes, chronic low back pain, and MASLD. Also **eloralintide**, **lepodisiran**, **muvalaplin**. - *Neuroscience:* donanemab (Kisunla) approved in U.S./EU/Japan for early Alzheimer's, Phase 3 in pre-clinical Alzheimer's; remternetug Phase 3; brenipatide Phase 3 in alcohol use disorder; **ixo-vec** (acquired with Adverum Biotechnologies) Phase 3 in wet AMD. - *Oncology:* imlunestrant (Inluriyo) and pirtobrutinib (Jaypirca) approved; **olomorasib** (KRAS G12C) and **sofetabart mipitecan** (FRα ADC) in Phase 3, both with FDA Breakthrough Therapy designations. - *Immunology:* mirikizumab (Omvoh) approved for Crohn's disease in U.S./EU/Japan; lebrikizumab Phase 3 in allergic rhinitis and CRSwNP. **Manufacturing.** Active ingredient and finishing operations sit in the U.S. (including Puerto Rico), Ireland, and other sites. To meet anticipated incretin demand, Lilly has undertaken significant capacity expansion, with new sites in North Carolina, Wisconsin, Indiana, Virginia, Texas, Alabama, Pennsylvania, Ireland, Germany, and the Netherlands. Certain materials are single-sourced, and Lilly — like the industry — depends on China-based suppliers for parts of its chemical supply chain. **Pricing and reimbursement environment.** In November 2025 Lilly announced preliminary voluntary agreements with the U.S. government: lower Medicaid and certain other U.S. drug prices, more balanced launch pricing across developed nations, Medicare beneficiary access to discounted Lilly obesity medicines by July 1, 2026 with an optional Medicaid expansion for states, participation in a government direct-to-patient purchasing platform, and a **three-year grace period from Section 232 tariffs conditioned on meeting U.S. manufacturing investment commitments**. Under the Inflation Reduction Act, HHS selected Jardiance among the first ten medicines subject to government-set Medicare prices effective 2026 (a 66 percent discount to the 2023 list price for a 30-day supply), and in January 2026 selected **Trulicity and Verzenio** for government-set prices effective 2028; Lilly expects additional products to be selected. Lilly operates a Contract Pharmacy Limited Distribution System for 340B sales and is litigating with HRSA over a proposed cash replenishment model (the D.C. district court sided with HRSA in May 2025; Lilly has appealed). Internationally, the EU reached an agreement-in-principle on revised pharmaceutical legislation in December 2025; Japan applies government-mandated price cuts; China's NRDL inclusion (which now includes Mounjaro) comes with significant price concessions. --- ## Risk factors *From the FY2025 10-K, accession 0000059478-26-000013 — condensed.* **Concentration in a few products, and specifically in incretins.** Mounjaro, Zepbound, Verzenio, Trulicity, Taltz, and Jardiance each produced more than $3 billion of revenue and together were **82 percent of 2025 total revenue**; **Mounjaro and Zepbound alone were 56 percent**. Loss of exclusivity, demand or channel swings, safety findings, pricing litigation, competitor pipeline results, counterfeits, or access/reimbursement setbacks in these products could materially move results — or produce sudden declines in the stock price. Management expects cardiometabolic products to remain a growing share of the business. **R&D is costly and fails often.** A significant portion of R&D spend generates no direct return. Candidates that look promising can fail late, after manufacturing capacity and launch inventory have been built. Lilly must keep replenishing the portfolio to cover R&D cost and to replace revenue lost to pricing controls, exclusivity expiry, and competing therapies; failure to do so would materially hurt the business, and the risk is exacerbated by concentration in one product class. **Pricing, reimbursement, and access controls.** Government and private payers continue to restrict pricing and access. Named exposures: the IRA's Medicare price-setting (nine years post-approval for NDA drugs, thirteen for biologics — a framework management says reduces the attractiveness of small-molecule investment); expansion of the 340B program and state laws mandating 340B contract-pharmacy sales; Medicaid rebate calculation changes; state drug affordability boards with upper-payment-limit authority; and the November 2025 U.S. government arrangements themselves, where Lilly may fail to capitalize on expanded access if incremental revenue does not offset the pricing concessions. Coverage for obesity medicines is a specific dependency: many international payers do not cover them for weight loss, leaving patient self-pay, and cash-pay volumes through LillyDirect are sensitive to price, economic conditions, and competing offers. **Supply-chain concentration.** In July 2025 **CVS Caremark stopped covering Zepbound as a preferred obesity medicine on some plans**, hurting access for those patients. U.S. distribution runs through a limited number of wholesalers; financial difficulty at one would disrupt supply or collections. PBM and payer consolidation continues to increase negotiating leverage against manufacturers. **Manufacturing and supply.** Capacity expansion is capital-intensive with long lead times and regulatory qualification requirements. Underbuilding causes shortages, lost revenue, and openings for competitors; **overbuilding against a demand forecast that does not materialize leaves stranded capital, supply imbalances, and possible contractual payment obligations**. Single-source and China-based dependencies (chemical synthesis, reagents, starting materials) add tariff and geopolitical exposure; qualifying alternates is slow and may not be feasible. **Intellectual property.** Products lose patent and data protection on a schedule; Trulicity is the near-term case. For non-biologics, loss of exclusivity typically brings rapid, severe revenue decline. Patents face Hatch-Waxman, BPCIA, and IPR challenges (IPR uses a lower standard of proof and no presumption of validity), plus weaker regimes and forced-transfer risks in some international markets. The December 2025 EU agreement-in-principle would make some IP incentives conditional and reduce the maximum data protection period. **Safety and efficacy after launch.** Post-approval use in much larger populations can surface new safety or efficacy signals, producing label changes, declining sales, recalls, withdrawals, and product liability claims. Class-level concerns — including from compounded or counterfeit versions — can be imputed to Lilly products. **Litigation and investigations.** Lilly is party to a substantial number of claims covering commercialization and pricing practices, product safety, IP, and contracts; it is **predominantly self-insured** for litigation liability on currently and previously marketed products. Specific pending matters disclosed in the Q1 2026 filing include: the 340B suits against HHS/HRSA (Seventh Circuit appeal pending) and the *Mosaic Health* antitrust class action (Second Circuit reversed dismissal; Lilly petitioned the Supreme Court in March 2026); the insulin pricing MDL in the District of New Jersey brought by consumers, states, municipalities, tribes, payers, and others; the average manufacturer price qui tam, where a 2022 jury verdict for the relator was affirmed by the Seventh Circuit in September 2025 (Lilly recognized a charge and petitioned the Supreme Court in March 2026); **incretin product liability MDLs in the Eastern District of Pennsylvania** covering alleged gastrointestinal injuries and NAION from Mounjaro, Trulicity, and Zepbound, plus state-court proceedings and class petitions in Israel and Canada; the *Health Choice Alliance* Texas Medicaid Fraud Prevention Act qui tam, expanded in August 2025 to fifteen products; and the Brazil Cosmopolis labor litigation, where the superior labor court significantly reduced the liquidated award in December 2025. In February 2026 the Ninth Circuit reversed in Lilly's favor in the Research Corporation Technologies matter, leaving Lilly with no further payments owed. **Business development execution.** Lilly competes for targets against heightened FTC and European regulatory scrutiny, and faces integration, diligence, and impairment risk. New-modality deals carry additional scientific uncertainty; deals may not close, may not produce a commercial product, and may generate charges. **International, currency, and tax.** Lilly is a net receiver of most foreign currencies (primarily euro, yen, yuan, sterling) and is hurt by a strong dollar. Tariffs and trade restrictions could raise costs that, given pharmaceutical pricing regulation, Lilly may not be able to pass on. Government single-payer power in the EU, Japan, and China constrains price and access. Tax law changes (OECD/EU global minimum tax, U.S. changes) and routine cross-border audits could raise the effective rate or produce assessments above accruals. **Cybersecurity and AI.** Lilly stores trade secrets, clinical data, and personal information in its own and third-party systems; a breach could impair IP rights, interrupt manufacturing, corrupt trial data, or trigger privacy penalties across the EU, UK, China, and U.S. regimes. To date such incidents have not had a material impact, and cyber liability insurance may not cover losses. Separately, Lilly's growing use of AI carries model-quality, vendor, regulatory (e.g., EU AI Act), and confidentiality risks, and AI may enable new competitors in drug discovery. **Regulatory compliance.** Marketing, promotional, and pricing practices draw enforcement that can produce criminal charges, penalties, and exclusion from federal healthcare programs. cGMP and quality issues can cause recalls, production interruptions, import bans, and approval delays. U.S. authorities have taken and may take further action restricting direct-to-consumer advertising. Management also notes that novel programs such as the FDA Commissioner's National Priority Voucher pilot — which Lilly used for orforglipron — may attract scrutiny and carry legal, political, and reputational risk. --- ## Management's discussion and analysis — FY2025 *From the FY2025 10-K, accession 0000059478-26-000013.* | | 2025 | 2024 | Change | |---|---|---|---| | Revenue | $65,179M | $45,043M | +45% | | Net income | $20,640M | $10,590M | +95% | | Diluted EPS | $22.95 | $11.71 | +96% | Revenue growth decomposed to **+50% volume, −6% price, +1% FX**. In the U.S. (revenue $43,481M, +43%) volume was +53% and price −10%; outside the U.S. ($21,698M, +48%) volume was +46% with flat price and +2% FX. Both the volume gain and the price erosion were driven by Mounjaro and Zepbound. Product revenue: **Mounjaro $22,965M (+99%)**, of which $13,651M U.S. (+53%) and $9,315M outside the U.S. (versus $2.6 billion in 2024); **Zepbound $13,542M (+175%)**, essentially all U.S. (+174%); **Verzenio $5,723M (+8%)**, with U.S. +1% and outside-U.S. +20%; all other products $22,949M (−1%). Cost and expense lines: gross margin $54,127M, **83.0% of revenue, up 1.7 points** on favorable mix and improved cost of production, partly offset by lower realized prices. R&D $13,337M (+21%) on early- and late-stage portfolio investment. Marketing, selling, and administrative $11,094M (+29%) on promotional support for ongoing and planned launches. Acquired IPR&D $2,910M (−11%), primarily Scorpion Therapeutics' PI3Kα program STX-478 and SiteOne Therapeutics (2024's $3,280M was primarily Morphic Holding). Effective tax rate **19.8% versus 16.5%**, up on jurisdictional mix and U.S. tax law changes, with both years hurt by non-deductible acquired IPR&D. Financial condition. Operating cash flow rose to **$16.8 billion from $8.8 billion**; cash and equivalents ended at $7.3 billion versus $3.3 billion. Capital expenditures were **$7.8 billion versus $5.1 billion**, and management expects meaningfully higher capex near term as manufacturing capacity is built. Investments totaled $2.9 billion, with roughly $902 million of unfunded venture capital commitments. **Total debt was $42.5 billion, up $8.9 billion year over year**; $10.1 billion of unused committed bank credit facilities were available, $10.0 billion supporting commercial paper. Lilly paid $3.0 billion for acquired IPR&D in 2025 (Scorpion's STX-478 and SiteOne). Contract manufacturing and supply agreements for medicines in development could require payment of up to approximately **$10 billion** if specified purchase volumes are not met over terms generally up to eight years. Dividends of $6.00 per share were paid in 2025 (2024: $5.20), with the quarterly rate raised to $1.73 effective Q1 2026 — an indicated 2026 annual rate of $6.92. Lilly repurchased $4.1 billion of shares in 2025 under the $15.0 billion program authorized in December 2024, leaving $10.9 billion. At year-end, pending 2026 acquisition agreements carried potential amounts payable at closing of **less than $3 billion**. Critical estimates worth noting: a 5 percent change in the consolidated sales return, rebate, and discount liability would change revenue by approximately **$897 million**, and about 87 percent of that liability balance relates to U.S. sales. A 5 percent change in uncertain tax positions and in the valuation allowance would change net income by $160 million and $61 million respectively. --- ## Current quarter — Q1 2026 (three months ended March 31, 2026) *From the Q1 2026 10-Q, accession 0000059478-26-000045.* | | Q1 2026 | Q1 2025 | Change | |---|---|---|---| | Revenue | $19,799M | $12,729M | +56% | | Net income | $7,396M | $2,759M | +168% | | Diluted EPS | $8.26 | $3.06 | +170% | Revenue decomposed to **+65% volume, −13% price, +4% FX**. U.S. revenue $12,119M (+43%: volume +49%, price −7%), driven by Zepbound and Mounjaro volume, with lower realized prices on Zepbound and Taltz. Outside-U.S. revenue $7,680M (+81%: volume +95%, price −25%, FX +11%), driven by Mounjaro volume, with price pressure from **adding Mounjaro to China's National Reimbursement Drug List**. By geography: U.S. $12,119M, Europe $3,646M, China $693M, Japan $571M, rest of world $2,771M. Product revenue: **Mounjaro $8,662M (+125%)** — U.S. $4,232M (+59%), outside-U.S. $4,430M versus $1,186M a year earlier; **Zepbound $4,160M (+80%)** — U.S. $4,134M (+79%), reflecting strong demand offset by lower realized prices including previously announced cash-pay price reductions; Verzenio $1,302M (+12%); Jardiance $1,114M (+10%); Trulicity $919M (−16%); Taltz $733M (−4%); other $2,910M (+14%). U.S. realized-price declines on both incretins were **partially offset by a favorable one-time adjustment to rebate and discount estimates** in the quarter; separately, revenue adjustments from changes in prior-period U.S. rebate/return estimates were less than 3 percent of U.S. revenue (versus less than 1 percent in Q1 2025). Net product revenue was $18,453M and collaboration and other revenue $1,346M, the latter including a $250 million one-time Jardiance benefit (Q1 2025: $370 million). Margins and expenses: gross margin $16,222M, **81.9% of revenue, down 0.6 points** on lower realized prices. R&D $3,510M (+28%), split $1,266M early-stage and $2,244M late-stage. Marketing, selling, and administrative $2,934M (+19%). Acquired IPR&D $584M versus $1,572M (the prior-year figure primarily Scorpion's STX-478). Effective tax rate **16.4% versus 20.2%**, mainly because the prior year carried a non-deductible acquired IPR&D charge; both periods included net discrete tax benefits. Interest expense $332M versus $244M. Capital expenditures on long-lived assets $2,438M versus $1,517M. **Mounjaro and Zepbound were 65 percent of total revenue in the quarter**, up from 56 percent for full-year 2025. Balance sheet and capital returns: cash and equivalents **fell to $5.3 billion from $7.3 billion**; investments $3.3 billion; **total debt $43.4 billion, up $0.9 billion** from year-end; $10.1 billion of unused committed bank credit facilities. Lilly repurchased **$2.3 billion of shares** (2.376 million shares at an average $987.15), leaving $8.6 billion of the $15.0 billion authorization, and paid **$1.5 billion of dividends, $1.73 per share**. Shares outstanding declined to 943.5 million from 944.8 million. **Pending 2026 acquisition agreements, subject to closing conditions, carried potential amounts payable at closing of up to approximately $12 billion** — up from "less than $3 billion" disclosed at year-end 2025. Acquisitions completed and recorded: **Ventyx Biosciences, Inc.**, acquired March 2026 for **$14.00 per share in cash, an aggregate $1.1 billion net of cash acquired** ($1,178M consideration, $120M cash acquired, $1,058M cash paid net), developing oral therapies for inflammatory-mediated diseases; acquired IPR&D of $977M relates primarily to VTX3232, and purchase accounting is preliminary. The prior-year comparative **Verve Therapeutics, Inc.** acquisition (July 2025) was $10.50 per share, $549 million net of cash acquired, plus a CVR of up to $3.00 per share (aggregate up to approximately $300 million) on a specified milestone; acquired IPR&D of $608M relates primarily to VERVE-102. Pipeline developments since the 10-K: **the FDA approved orforglipron (Foundayo) for the treatment of obesity**, and a Phase 3 orforglipron trial in type 2 diabetes met its primary endpoint; a Phase 3 retatrutide trial in type 2 diabetes met its primary endpoint; Phase 3 trials were initiated for baricitinib in type 1 diabetes, eloralintide as an incretin add-on for obesity and separately in obstructive sleep apnea and osteoarthritis pain, brenipatide in major depressive disorder, and sofetabart mipitecan in platinum-sensitive ovarian cancer. Orforglipron is licensed from Chugai, which receives tiered royalties on worldwide net sales in the mid-single-digit to low-teens percentage range. Guidance and outlook language: Lilly **finalized** its voluntary agreements with the U.S. government in Q1 2026. Under the **Medicare GLP-1 Bridge program**, Medicare beneficiaries will have access to discounted Lilly obesity medicines from July 1, 2026 through December 31, 2027, with states able to expand Medicaid access; Lilly continues to engage CMS on long-term Medicare access and states plainly that **"the uptake from this expanded access is unknown."** Management expects near-term performance to hinge on the timing of additional orforglipron approvals and on demand and pace of uptake in new incretin channels and markets, including U.S. Medicare for Zepbound and Foundayo, and notes that incretin volume fluctuations from channel dynamics or demand can disproportionately affect any given period. Longer term it frames durability as dependent on defending competitive position and delivering further innovation. Risk factors were unchanged from the 10-K, and there were no material changes to critical accounting estimates. Disclosure controls were assessed as effective, with no material changes in internal control during the quarter. --- ## Subsequent events Lilly's Q1 2026 Form 10-Q (accession 0000059478-26-000045) states that the company evaluated subsequent events up to the time of filing and does not present a separate subsequent-events note; the material post-period items appear in the body of that filing and in Current Reports on Form 8-K. - **FDA approval of Foundayo (orforglipron) for obesity — April 2026.** Disclosed in the Q1 2026 10-Q, accession 0000059478-26-000045. This is Lilly's oral GLP-1 and was reviewed under the FDA Commissioner's National Priority Voucher pathway. Orforglipron has also been submitted for obesity internationally. - **2026 annual meeting of shareholders — May 4, 2026.** Reported on Form 8-K filed May 7, 2026, accession 0000059478-26-000048. Directors Carolyn Bertozzi, William Kaelin Jr., Jon Moeller, and David Ricks were elected to three-year terms; say-on-pay was approved; Ernst & Young LLP was ratified as independent auditor for 2026. Management proposals to **eliminate the classified board structure and to eliminate supermajority voting provisions both failed** to reach the required 80 percent of outstanding shares (665.4 million and 664.5 million shares for, respectively, against 944.8 million outstanding). Shareholder proposals for an independent board chair and for an annual lobbying report were not approved. - **$9.0 billion senior notes offering completed May 20, 2026**, reported on Form 8-K filed May 20, 2026, accession 0001193125-26-232707. The offering comprised $750 million Floating Rate Notes due 2028 (Compounded SOFR + 0.350%), $500 million Floating Rate Notes due 2029 (Compounded SOFR + 0.460%), $750 million 4.150% Notes due 2029, $1.5 billion 4.375% Notes due 2031, $1.25 billion 4.650% Notes due 2033, $1.5 billion 4.850% Notes due 2036, $1.75 billion 5.600% Notes due 2056, and $1.0 billion 5.700% Notes due 2066. **Net proceeds were approximately $8.94 billion** after underwriting discounts and before offering expenses. Morgan Stanley, Citigroup, Deutsche Bank Securities, and Goldman Sachs acted as representatives of the underwriters. - **Pending acquisition of Centessa Pharmaceuticals plc.** The same May 20, 2026 notes offering (accession 0001193125-26-232707) ties $5.5 billion of the new notes — the 2029 Floating Rate Notes, 2029 Notes, 2031 Notes, 2033 Notes, and 2036 Notes — to a **Centessa Special Mandatory Redemption at 101% of principal plus accrued interest** if the acquisition is not consummated within five business days after the later of March 31, 2027 or any agreed later outside date, or if Lilly notifies the trustee it will not pursue the transaction. The notes documents identify the target as **Centessa Pharmaceuticals plc, a public limited company registered in England and Wales**, to be acquired through LDH XV Corporation, a wholly owned Delaware subsidiary, under a **Transaction Agreement dated March 31, 2026**. Lilly's own SEC filings reviewed here do not state a per-share or aggregate purchase price for Centessa; the only related figure Lilly discloses is the aggregate for all pending 2026 acquisitions — potential amounts payable at closing of **up to approximately $12 billion** as of March 31, 2026, per the Q1 2026 10-Q. The 2028 Floating Rate Notes, 2056 Notes, and 2066 Notes are not subject to the Centessa redemption. - **Board composition.** Carolyn R. Bertozzi, Ph.D., Professor of Chemistry at Stanford University and an HHMI Investigator, was elected to the board effective December 8, 2025 (Form 8-K filed November 21, 2025, accession 0000059478-25-000271) and was elected by shareholders at the May 2026 annual meeting. She serves on the Science and Technology Committee and the Ethics and Compliance Committee.