A Zepbound injection pen, Eli Lilly’s weight loss drug, is seen in New York, U.S., December 11, 2023.
Brendan McDermid | Reuters
Eli Lilly on Tuesday mentionted Fourth-quarter revenue and adjusted earnings beat expectations on strong launch of new weight-loss drug Zepbound and higher prices for blockbuster diabetes treatment Mounjaro.
Zepbound, which won approval from US regulators in early November, posted $175.8 million in sales for the fourth quarter.
The quarterly results are the first to include sales of Zepbound, which some analysts say could generate more than $1 billion in sales in its first year on the market and eventually become the biggest drug of all time.
Shares of Eli Lilly fell more than 1% on Tuesday after the results. The stock jumped nearly 60% last year as the weight-loss drug soared in popularity despite high prices, patchy insurance coverage, a handful of nasty side effects and supply shortages. With a market capitalization of approximately $673 billion, Eli Lilly is the largest pharmaceutical company based in the US
See what Eli Lilly had to say about it quarter quarter compared to what Wall Street expected, based on a survey of analysts from LSEG, formerly Refinitiv:
- Earnings per share: $2.49 adjusted vs. $2.22 expected
- Income: $9.35 billion vs. $8.93 billion expected
Eli Lilly posted net income of $2.19 billion, or $2.42 per share, for the fourth quarter. That compares with a profit of $1.94 billion, or $2.14 per share, a year earlier.
Excluding one-time items related to the value of intangible assets, among other adjustments, the company posted earnings per share of $2.49 for the fourth quarter of 2023.
The pharmaceutical giant posted revenue of $9.35 billion for the fourth quarter, up 28% from the same period last year.
Eli Lilly also issued its full-year forecast for 2024, which was broadly in line with expectations.
The company expects full-year adjusted earnings of $12.20 to $12.70 per share. Eli Lilly also forecast 2024 revenue of $40.4 billion to $41.6 billion.
Analysts polled by LSEG had expected adjusted earnings of $12.43 per share and sales of $39.38 billion for the full year.
Eli Lilly expects revenue growth to accelerate in the second half of the year, consistent with increased availability of incretin drug doses, the company’s chief financial officer, Anat Ashkenazi, said during an earnings conference call on Tuesday. Incretin drugs are treatments like Mounjaro and Zepbound that mimic hormones produced in the gut to suppress appetite and regulate blood sugar.
Mounjaro sees higher demand, prices
Eli Lilly expects demand for its incretin drugs to outstrip supply in 2024, according to Ashkenazi.
However, Ashkenazi said the company met its goal of doubling its incretin drug production capacity by the end of 2023. He added that Eli Lilly’s capacity expansion efforts will continue with “equal urgency,” with the most significant increases production to be noted in the second half of the year.
By that point in the year, Ashkenazi said the company expects production of marketable doses of incretin drugs to be at least 1.5 times higher than production of those doses in the second half of last year.
Among the company’s efforts to expand production is a new manufacturing facility in Concord, North Carolina. Ashkenazi said the plant will begin production of incretin drugs as early as late 2024, with products available for shipment in 2025.
Higher prices for older drugs, particularly Mounjaro, helped boost Eli Lilly’s revenue, the company said. Mounjaro posted sales of $2.21 billion for the fourth quarter, up from just $279.2 million in the same period a year ago.
Analysts had expected the drug to generate $1.73 billion in global sales, according to estimates compiled by FactSet.
That increase reflects increased demand but also “higher realized prices” in the US due to reduced use of Eli Lilly’s savings card programs as access to the drug continued to expand during the quarter, the company said. Savings card programs aim to reduce out-of-pocket costs for drugs like Mounjaro for patients.
Eli Lilly expects a high single-digit percentage price decline in 2024 for its core drug business, with a more significant decline expected in the second half of the year.
Results from the entire portfolio
Revenue growth also came from sales of Eli Lilly’s breast cancer pill Verzenio, which rose 42% to $1.15 billion for the quarter on increased demand and higher prices.
That result was below analysts’ expectations, however, which called for sales of $1.18 billion for the period.
Sales of Jardiance, a tablet that lowers blood sugar in patients with type 2 diabetes, rose 30% to $798.1 million for the fourth quarter. Analysts had expected $771.8 million in sales from Jardiance.
Jardiance, which Eli Lilly shares with Boehringer Ingelheim, is among the first 10 drugs selected to face price negotiations with the federal Medicare program. Those price discussions intensified last week after Medicare sent its initial price offers for each drug to manufacturers.
Meanwhile, Eli Lilly said higher prices were offset by lower prices for its other diabetes drug Trulicity and insulin product Humalog.
Trulicity reported revenue of $1.67 billion, down 14% from the same period last year. Analysts expected Trulicity to have $1.77 billion in sales for the quarter.
Humalog posted revenue of $366.6 million for the quarter, down 33% from the year-ago period. Analysts had expected the drug to have sales of $438 million, according to FactSet.
This decline is no surprise: Last year, Eli Lilly said it would happen cut the prices of Humalog and another commonly prescribed insulin by 70% and capped the monthly cost at $35 at certain retail pharmacies for people with private insurance starting May 1, 2023.
During an earnings call, Eli Lilly reiterated that it expects an FDA decision on Eli Lilly’s experimental Alzheimer’s drug, donanemab, in the first quarter of the year. This treatment significantly slowed the progression of the memory-depriving disease in patients in its early stages.
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