Eli Lilly reported Thursday second quarter earnings and revenue that beat past expectations and boosted its full-year revenue outlook by $3 billion as sales of blockbuster diabetes drug Mounjaro and weight-loss injection Zepbound increased.
Shares of Eli Lilly closed more than 9% higher on Thursday.
The drugmaker now expects revenue for the year to range between $45.4 billion and $46.6 billion, an increase of $3 billion at either end of the range.
The company also raised its full-year adjusted earnings to a range of $16.10 to $16.60, versus previous guidance of $13.50 to $14 per share.
Eli Lilly said the increase in guidance was primarily due to the strong performance of Mounjaro and Zepbound and was due in part to “improved clarity” on the company’s production expansions and planned launches of Mounjaro outside the U.S. The company said it achieved several milestones related to the offering during the quarter, without giving specifics.
Demand has far outstripped supply for incretin drugs like Zepbound and Mounjaro, which mimic hormones produced in the gut to suppress a person’s appetite and regulate their blood sugar. This forced Eli Lilly and its rival Novo Nordisk to invest heavily to boost manufacturing.
But Eli Lilly’s supply woes may have begun to ease. On Friday, the Food and Drug Administration’s drug database reported that all doses of Zepbound and Mounjaro are available in the US after widespread shortages.
However, the company warned that expected increases in demand may lead to periodic “supply tightness” for some doses of the incretin drugs.
“We’re just seeing incredible demand and we’re not even trying that hard to promote this drug,” Eli Lilly CEO David Ricks told CNBC. “What you’re seeing is just organic consumer demand here as we’ve shipped more product, as we’ve brought more supply online to the United States.”
Ricks said the company has built six manufacturing plants, some of which are already ramping up, and has hired thousands of workers to ramp up production. Eli Lilly expects incretin drug production in the second half of 2024 to be 50% higher than it was in the same period last year, it noted.
“We’re on that kind of ramp up to 2025,” he said. Ricks added that Eli Lilly is still developing more convenient weight loss pills, which could help the company meet growing demand.
Here’s what Eli Lilly reported for the second quarter compared to what Wall Street expected, based on a survey of analysts from LSEG:
- Earnings per share: $3.92 adjusted vs. $2.60 expected
- Annuity: $11.30 billion versus $9.92 billion expected
The pharmaceutical giant posted net income of $2.97 billion, or $3.28 per share, for the second quarter. That compares with earnings of $1.76 billion, or $1.95 per share, a year earlier.
Excluding one-time items related to the value of intangible assets and other adjustments, Eli Lilly posted earnings of $3.92 per share for the second quarter of 2024.
The company posted revenue of $11.30 billion for the second quarter, up 36% from the same period last year.
Eli Lilly said sales were largely driven by higher demand for Mounjaro and Zepbound as production ramps up improving supply in the US
It’s Zepbound’s second full quarter in the US market after winning regulatory approval in November. The weekly injection hit sales of $1.24 billion for the period, well above the $922.2 million analysts were expecting, according to StreetAccount.
As of July 1, Zepbound was available on about 86 percent of commercial insurance coverage lists in the U.S., Eli Lilly officials said during an earnings call Thursday. This is above 67% from April 1st, according to a first-quarter earnings presentation.
Meanwhile, Mounjaro posted revenue of $3.09 billion for the second quarter, more than triple its sales in the prior period. Analysts had expected $2.39 billion in sales, according to StreetAccount.
Mounjaro prices were higher in the U.S. in the second quarter, driven in part by greater access to the drug and reduced use of savings card programs compared to the prior period.
But the company said the savings cards should have “minimal impact” on price comparisons made in the second half of the year because the $25 monthly coupon for uninsured patients for Mounjaro expired in June.
Ricks told CNBC that pricing for Eli Lilly’s incretin drugs was “fairly stable” in the second quarter.
During the call, executives also said the company expects consistent pricing sequentially in all quarters this year, with no unusual trends.
That differs from Novo Nordisk, which reported lower-than-expected second-quarter sales of weight-loss drug Wegovy and diabetes drug Ozempic on Wednesday, partly due to price pressure.
Revenue from Wegovy 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 in an earnings call on Wednesday.
Shares of Eli Lilly have risen more than 30% this year after jumping nearly 60% in 2023 on growing demand for the company’s weight-loss and diabetes drugs — and heightened investor interest in their potential as treatments for other health conditions. This popularity comes despite hefty monthly rates, inconsistent insurance coverage and intermittent supply shortages.
With a market capitalization of more than $730 billion, Eli Lilly is the largest pharmaceutical company based in the US
