Is Lilly Spending Too Much?

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Eli Lilly (LLY) is building new U.S. plants. Management said on its October 29 call that the company had broken ground on two new manufacturing facilities in Houston, Texas, and Richmond, Virginia. Capital spending came to $19.0 billion over the twelve months to September 2026, compared with $6.38 billion three years earlier. A bill rising that fast makes investors ask whether Lilly can afford it. So what share of Lilly’s sales do you think the bill now takes?

How Big Is Lilly’s Spending Bill?

Over the last twelve months, the bill took 21.9% of Lilly’s sales, against 19.9% in the twelve months to September 2023. The bill is about three times what it was then, yet its share of sales rose only modestly, so sales have kept almost in step with it. And the bill is still climbing: in the quarter to September 2026, Lilly spent 157.9% more than in the same quarter a year earlier.

Can Lilly Pay For It?

In the quarter to September 2026, the bill took 63.5% of the cash Lilly’s business brought in, compared with 31.8% in the same quarter a year earlier.

The cash left after the spending was about 31% lower than a year earlier, although that year-earlier quarter brought in far more cash than the quarter before or after it. In none of the last four quarters did Lilly spend more cash than its business brought in.

Over the last twelve months, the bill took 61.9% of that cash. So the business still pays for the spending with room to spare, just less room than in the twelve months to September 2025, when the share was 59.9%.

What Has The Spending Bought So Far?

Over the three years to September 2026, Lilly’s sales grew 169.6%. Management credited the third quarter’s growth to Mounjaro, Zepbound and strong momentum across its other medicines.

Lilly spent $36.9 billion over those three years, and its business now brings in $24.4 billion more cash a year than it did three years ago. At that rate, the extra cash would take about 1.5 years to match what was spent, though this compares past spending with past growth, not all of which came from the spending. Just over half of the spending came in the last twelve months alone, so much of it may not yet have had time to add to sales.

What Must Go Right For Lilly

Management said on the October 29 call that the new plants support its long-term growth outlook, and that the company still reaches only about 1 out of 10 U.S. patients with its weight-loss and diabetes medicines. Management expects lower prices to be a headwind that volume growth more than offsets. In the third quarter, U.S. prices fell 10% excluding a one-time adjustment to rebate estimates.

So Lilly has to keep selling more of these medicines faster than their prices fall, while the bill is still rising. The number to watch when Lilly reports in February 2027 is the cash it has left after the spending each quarter. In the latest quarter, that figure was below its level a year earlier.

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