Eli Lilly Powers Investor Confidence with New $15B Share Buyback Program

In a move that underscores its soaring market performance and investor confidence, Eli Lilly announced a massive $15 billion share buyback program.

The share repurchase program was approved by Lilly’s board of directors. The company’s previous $5 billion share repurchase program was completed in the fourth quarter of 2024.

Stock buybacks, which involve a company repurchasing its own shares from the market, typically result in a reduction of outstanding shares, thereby increasing earnings per share (EPS) and potentially boosting stock prices.

The program comes as the pharmaceutical giant continues to build on its remarkable growth trajectory driven by blockbuster GLP-1 diabetes and obesity drugs Mounjaro and Zepbound, respectively.

Lilly also announced that for the seventh consecutive year of growth, the board has also approved a 15 percent increase in its quarterly dividend. For the first quarter of 2025, a dividend of $1.50 per share has been declared, which is payable on March 10, 2025, to shareholders of record at the close of business on February 14, 2025.

For Eli Lilly, the initiative is a move to maximize shareholder value and reinforce its strong financial position while signaling optimism about its future growth.

Related: Eli Lilly’s Tirzepatide Shows Promise for Keeping Prediabetic Patients Diabetes-Free

GLP-1 Drugs Mounjaro, Zepbound, Wegovy Back in Stock After Extended Shortages

Lilly appears to have enough in its bag to continue investing in its current pipeline and new launches, and paying out its investors.

“As Lilly has entered into a period of rapid growth, our capital allocation priorities remain the same. We will continue to focus on supporting new launches, expanding our manufacturing capacity and advancing our pipeline through research and development and business development,” said Lucas Montarce, Lilly executive vice president and chief financial officer, in a press release announcing the share buyback program.

“However, given the strong growth profile of the company, we’re also increasing the amount of capital we plan to return to shareholders. We expect to execute this program over the next three years.”

With a series of strong quarterly earnings reports, Eli Lilly has consistently surpassed Wall Street expectations, driven by growing demand for Mounjaro and Zepbound.

However, despite the company’s rapid financial growth over the past couple of years, sales of the flagship drugs did not meet analyst expectations in the third quarter. Mounjaro generated $3.11 billion in sales while Zepbound revenues totaled $1.26 billion, both missing Wall Street estimates.

In response, the company trimmed the top end of its annual revenue forecast by $600 million, from $46.6 billion to $46 billion, which triggered an eight percent drop in its share price.

Despite this, the success of the drugs remains unparalleled, as both products contributed to driving Lilly’s revenue up by 42 percent compared with the third quarter of 2023.

In a statement about Lilly’s third quarter performance, David A. Ricks, Lilly chair and CEO noted that despite the “impressive” growth of Mounjaro and Zepbound, the company is “equally proud of the 17 percent growth in non-incretin revenue, which includes our oncology, immunology and neuroscience portfolios, compared with Q3 2023 on the same basis.”

“The new product approvals for Ebglyss and Kisunla, exciting new pipeline data for tirzepatide, donanemab, imlunestrant and lebrikizumab, as well as key milestone achievements in our supply network, all point to the continued expansion of our impact on human health and significant growth of the company ahead.”

According to a recent investor presentation, during the first nine months of the year, Lilly allocated $6.7 billion to R&D, $3.4 billion to capital investments, $4.5 billion to business development, $3.5 billion to dividend payments and $400 million to buybacks.

In the presentation, the company shared that new products revenue, led by Mounjaro and Zepbound, grew by over $3 billion.

Given the continuing high demand for GLP-1 drugs from Lilly and rival Novo Nordisk, maker of Ozempic and Wegovy, the companies have been struggling to produce enough supply, which has resulted in shortages of the medications since 2022.

Although Lilly’s Mounjaro and Zepound shortages have been “resolved,” according to the US Food and Drug Administration (FDA), Lilly continues to prioritize manufacturing capacity to meet the surging demand for the products.

Last week, the company announced a $3 billion investment to expand its Kenosha, Wisconsin, facility, which it acquired from Nexus Pharmaceuticals in April for $925 million. The expansion will support the addition of 750 new staff members at the plant.

Additionally, Lilly committed $4.5 billion in October to establish a new R&D and manufacturing facility in Indiana.

Over the past year, Eli Lilly’s share price has increased approximately 43 percent, sitting at $790.35 a share as of December 12, 2024. The buyback program could add more fuel to this rally, cementing Eli Lilly’s position as a market leader.

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