Eli Lilly Vs. Merck: One is a No-Brainer to Hold Through 2030

Eli Lilly Vs. Merck: One is a No-Brainer to Hold Through 2030

Alex Sirois

Tue, September 15, 2026 at 3:30 PM GMT+3 4 min read

• LLY +0.15%
• MRK +0.78%

Quick Read

• Lilly's Q2 revenue surged 48% to $23 billion on Mounjaro and Zepbound strength; Merck grew just 5% as KEYTRUDA nears peak penetration.

• Lilly's raised FY2026 guidance of $85 to $87 billion and 86% gross margin make it the stronger hold, while Merck's 15x P/E suits income investors.

• Foundeo prescribers jumped from 8,000 to 36,000 in one quarter, and retatrutide showed near-bariatric weight loss results in Phase 3.

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Eli Lilly (NYSE: LLY) and Merck (NYSE: MRK) both just posted second quarter results, and the split screen is telling. Lilly is compounding on an incretin franchise that keeps widening. Merck is racing to rebuild around a KEYTRUDA patent cliff. Same sector, radically different setups heading into 2030.

Incretins Do the Heavy Lifting. KEYTRUDA Starts to Plateau.

Lilly reported Q2 revenue of $22.97 billion, up 47.7% year over year, with Mounjaro at $9.94 billion (+91%) and Zepbound at $4.93 billion (+46%). Volume rose 60% while price fell 13%, which is the tradeoff you want when demand is this deep. CEO Dave Ricks said "Lilly's momentum continues, as we delivered 48% revenue growth and raised our full-year guidance."

Merck's Q2 revenue landed at $16.6 billion, up 5%, with the KEYTRUDA family at $8.4 billion, growing just 4%. Management admitted U.S. KEYTRUDA growth will moderate as the drug reaches peak penetration. A $5.7 billion Terns acquisition charge pushed the company to a reported loss.

Business Driver

Lilly

Merck

Main Growth Engine

Mounjaro and Zepbound

KEYTRUDA, plus new launches

Q2 Revenue Growth

47.7%

5%

Management Focus

Scaling supply

Diversifying beyond one drug

Compounding Franchise vs. Portfolio Reconstruction

Lilly is layering assets onto a franchise that already works. Retatrutide showed weight loss "approaching bariatric surgery levels" in Phase 3, and orforglipron (branded Foundeo) is now the first once-daily oral GLP-1. Prescriber counts for Foundeo jumped from roughly 8,000 to 36,000 in one quarter. FDA also cleared Mounjaro for cardiovascular risk reduction in type 2 diabetes on August 28.

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Merck's strategy leans on offsets. Lipvendra, the first oral PCSK9 inhibitor, targets 30 million undertreated U.S. patients. WINREVAIR grew 75% to $588 million, and SAC-TMT hit Phase 3 in endometrial cancer. CEO Rob Davis frames the KEYTRUDA transition as "more of a hill than a cliff." I want to believe him, but GARDASIL China stayed weak and three Phase 3 oncology trials missed. The rebuild is real. The timing remains the open question.

Lens

Lilly

Merck

Forward P/E

Core Bet

Incretin dominance through 2030

New launches replacing KEYTRUDA

Key Vulnerability

Novo Nordisk, capacity

KEYTRUDA loss of exclusivity

What Decides the Next Two Years

For Lilly, I am watching the retatrutide BLA in Q1 2027, Foundeo's global rollout, and whether the extra $4.5 billion in Indiana capacity keeps supply ahead of demand. For Merck, the tell is whether Lipvendra access builds fast enough and whether tulisokibart delivers a second UC readout to complete its filing package.

Why Lilly Looks Like the Cleaner Growth Story Through 2030

The setup favors Lilly on growth durability. The math is simple to me: a raised FY2026 guide of $85 to $87 billion in revenue, an 85.8% gross margin, and a pipeline stacked with retatrutide, orforglipron, and PCSK9 gene editing. The stock trades at a forward P/E of 24, a premium multiple that reflects the quality of the earnings growth. Merck at a forward P/E of 15 and a 2.29% yield fits a value or income investor better. If you want fewer surprises and a longer runway of durable growth, Lilly screens as the more durable growth profile.

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One investment mistake could create big risks for your retirement. Many investors make the same critical errors: being too conservative, making big bets on "sure things," or paying excessive fees. Any of those blunders can endanger your hard-earned savings.

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