Eli Lilly on Thursday reported second-quarter earnings and revenue that beat expectations and raised its full-year sales forecast by $3 billion as sales of its diabetes drug Mounjaro and weight-loss injection Zepbound jumped.
Eli Lilly shares closed more than 9% higher on Thursday.
The pharmaceutical manufacturer now expects sales of between $45.4 billion and $46.6 billion for the coming year, an increase of $3 billion at each end of the range.
The company also raised its adjusted annual earnings to $16.10 to $16.60, compared to a previous forecast of $13.50 to $14 per share.
Eli Lilly said the increase in guidance was primarily due to strong performance from Mounjaro and Zepbound and in part due to “improved clarity” regarding the company's manufacturing expansions and planned launch of Mounjaro outside the U.S. The company said it achieved several supply-related milestones during the quarter, but did not provide specific details.
Demand far exceeds supply for incretin drugs like Zepbound and Mounjaro. These drugs mimic hormones produced in the gut to suppress appetite and regulate blood sugar. This has forced Eli Lilly and its rival Novo Nordisk to invest massively to boost production.
But Eli Lilly's supply shortages may gradually ease. On Friday, the drug database of the American Food and Drug Administration (FDA) reported that after a long period of shortages, all doses of Zepbound and Mounjaro were available again in the USA.
However, the company cautioned that the expected increase in demand could lead to temporary “supply bottlenecks” for certain doses of its incretin drugs.
“We're just seeing incredible demand and we're not even trying to promote this drug particularly heavily,” Eli Lilly CEO David Ricks said in an interview with CNBC. “What you're seeing here is just organic consumer demand as we've shipped more product and brought more supply online in the United States.”
Ricks said the company has built six manufacturing plants, some of which are already in operation, and hired thousands of workers to increase production. Eli Lilly expects production of incretin drugs to be 50% higher in the second half of 2024 than in the same period last year, he noted.
“We're on track to do that until 2025,” he said. Ricks added that Eli Lilly is still developing more convenient weight-loss pills that could help the company meet rapidly increasing demand.
Here's what Eli Lilly reported for the second quarter and what Wall Street expected based on an analyst survey conducted by LSEG:
- Earnings per share: USD 3.92 adjusted versus USD 2.60 expected
- Revenue: 11.30 billion US dollars compared to expected 9.92 billion US dollars
The pharmaceutical giant posted net profit of $2.97 billion, or $3.28 per share, for the second quarter. In the same period last year, profit was $1.76 billion, or $1.95 per share.
Excluding one-time items related to the value of intangible assets and other adjustments, Eli Lilly reported earnings of $3.92 per share for the second quarter of 2024.
The company reported second-quarter revenue of $11.30 billion, up 36% from the same period last year.
According to Eli Lilly, sales were primarily due to increased demand for Mounjaro and Zepbound as production increases improved supply in the United States.
It is Zepbound's second full quarter in the U.S. market after receiving regulatory approval in November. The weekly cash injection brought in revenue of $1.24 billion for the period, well above the $922.2 million expected by analysts, according to StreetAccount.
As of July 1, Zepbound was available in about 86 percent of commercial insurance lists in the U.S., Eli Lilly executives said during a conference call Thursday. That's up from 67 percent on April 1, according to a first-quarter earnings presentation.
Meanwhile, Mounjaro posted second-quarter revenue of $3.09 billion, more than triple the revenue of the same period last year. Analysts had expected revenue of $2.39 billion, according to StreetAccount.
Prices for Mounjaro were higher in the U.S. in the second quarter, partly due to increased access to the drug and lower use of savings card programs compared to the same period last year.
However, the company said savings cards are expected to have “only a minimal effect” on actual price comparisons in the second half of the year because the $25 monthly coupon for patients without insurance coverage for Mounjaro expired in June.
Ricks told CNBC that prices for Eli Lilly's incretin drugs were “fairly stable” in the second quarter.
During the conference call, executives also said the company expects quarterly pricing to be stable with no unusual trends this year.
The situation is different for Novo Nordisk, which on Wednesday reported weaker-than-expected second-quarter sales of its weight-loss drug Wegovy and the diabetes injection Ozempic, partly due to price pressure.
Wegovy's revenue was hit by higher-than-expected price concessions to U.S. pharmacy benefit managers, who negotiate drug discounts with manufacturers on behalf of insurers, Novo Nordisk executives said Wednesday during a quarterly earnings conference call.
Eli Lilly shares have risen more than 30% this year after rising nearly 60% in 2023, thanks to rising demand for the company's weight-loss and diabetes drugs — and increased investor interest in their potential as treatments for other health conditions. That popularity comes despite their high monthly prices, inconsistent insurance coverage and intermittent supply shortages.
With a market capitalization of over $730 billion, Eli Lilly is the largest pharmaceutical company based in the United States
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