AI Stayed in the Background During Lilly and Novartis' Earnings Calls

Eli Lilly and Novartis reported strong second-quarter results for different reasons. Lilly continued to benefit from demand for its obesity and diabetes medicines, while Novartis pointed to growth across a newer generation of medicines as it moves beyond Entresto's patent expiry.

Much of each call focused on pipeline expansion, acquisitions, manufacturing capacity, and late-stage clinical development.

Lilly raised its full-year revenue guidance to $85 billion-$87 billion after another quarter of strong demand for MOUNJARO and ZEPBOUND. Novartis reaffirmed its full-year guidance as medicines including KISQALI, PLUVICTO, LEQVIO, Kesimpta, and Scemblix continued to drive growth.

Rather than dwelling on quarterly performance, executives from both companies used the calls to discuss what comes next. Lilly highlighted higher R&D spending, more than 40 active Phase III programs, and continued business development, while Novartis focused on investment behind recently acquired pipeline assets and an extensive slate of regulatory and clinical milestones.

Blockbuster Revenue Is Funding the Next Wave of R&D

Both companies are generating billions of dollars from commercial products. Their earnings calls suggest much of that cash is being reinvested into research, manufacturing, and business development.

Lilly's management repeatedly returned to the breadth of its research organization. Chief Scientific and Product Officer Dan Skovronsky highlighted more than 40 active Phase III programs spanning cardiometabolic disease, oncology, neuroscience, immunology, vaccines, and gene editing.

Alongside its internal pipeline, Lilly also continued expanding through business development, highlighting acquisitions and licensing activity aimed at strengthening its portfolio across multiple therapeutic areas.

Chief Financial Officer Lucas Montarce said R&D expenses increased 14% year over year, driven by continued investment across the company's pipeline. The company paired that increase with another strong quarter financially, reinforcing management's view that investment in research remains a priority.

CEO Vas Narasimhan spent much of the Novartis earnings call discussing regulatory milestones, radioligand therapies, RNA medicines, and upcoming clinical readouts rather than quarterly financial performance. Chief Financial Officer Mukul Mehta said incremental R&D spending reflected investments in recently acquired businesses including Avidity, alongside previously acquired assets such as Tourmaline, Regulus, and Amplyx.

Both management teams described higher R&D spending as a deliberate investment in their pipelines.

Acquisitions Are Expanding Discovery Engines

The acquisitions discussed during both calls point to another trend.

Many large pharmaceutical acquisitions have traditionally focused on late-stage assets expected to contribute revenue relatively quickly. Increasingly, Novartis and Lilly are acquiring technologies that can support multiple drug programs instead of adding only individual products.

Novartis' acquisition of Avidity strengthens its position in RNA therapeutics while complementing broader investments in precision medicine.

Outside the earnings call, the company has also continued expanding its AI-enabled drug discovery efforts through collaborations, including its work with Chai Discovery on antibody design and biologics research.

Lilly's broader business development strategy also complements earlier investments in AI-powered biologics discovery and computational drug development infrastructure through initiatives including its NVIDIA collaboration.

AI Wasn't the Main Story

One notable omission from both earnings calls was any sustained discussion of AI.

Despite both companies making significant investments in AI-enabled drug discovery over the past two years, executives rarely discussed artificial intelligence directly.

Instead, discussions centered on biomarker discovery, antibody engineering, platform technologies, manufacturing expansion, gene editing, and external innovation partnerships.

The earnings calls suggest AI is increasingly being discussed as one component of broader investments in research platforms rather than as a standalone growth narrative.

Lilly's obesity franchise and Novartis' growing portfolio of oncology, cardiovascular, and neuroscience medicines continue to generate substantial cash.

Both companies indicated that strong commercial performance is allowing them to continue investing heavily in research and development. That includes expanding manufacturing capacity ahead of demand, advancing dozens of late-stage clinical programs simultaneously, and acquiring technologies capable of supporting multiple future medicines.