The Eli Lilly logo is displayed at one of the company's offices in San Diego, California, USA, September 17, 2020.
Mike Blake | Reuters
Eli Lilly on Tuesday it reported first-quarter adjusted earnings that beat Wall Street expectations and raised its full-year expectations on strong sales of its blockbuster diabetes drug Mounjaro and recently launched weight-loss treatment Zepbound.
The drugmaker now expects full-year adjusted earnings of $13.50 to $14.00 per share, compared to a previous forecast of $12.20 to $12.70 per share. Eli Lilly also expects revenue this year to be between $42.4 billion and $43.6 billion, an increase of $2 billion at either end of the range.
Analysts polled by LSEG expected full-year adjusted earnings of $12.50 per share and revenue of $41.44 billion.
The company said the improved guidance is due in part to “greater visibility” into its production expansion of Zepbound, Mounjaro and similar drugs for the remainder of the year.
The results and increase in guidance reflect Zepbound's first full quarter in the US market after receiving regulatory approval in early November. The drug reported first-quarter sales of $517.4 million, even as most doses of the drug in the U.S. fell into shortages expected to last until June.
Analysts say the weekly shot could generate more than $1 billion in sales in its first year on the market and potentially become the biggest drug of all time.
Eli Lilly noted that demand for Mounjaro and Zepbound – treatments known as incretin drugs, which mimic hormones produced in the intestines to suppress a person's appetite and regulate blood sugar levels – increased supply during surpassed the quarter.
The company said it continues to expand its manufacturing footprint, with the largest production increases expected in the second half of the year.
“Our top priority is making more products, and we are doing everything we can to do that,” Eli Lilly CEO David Ricks said in an interview on CNBC's “Squawk Box.” “We are aggressively ramping that up. But it is capital intensive, technically complex and highly regulated.”
Ricks added that Mounjaro and Zepbound are among the “most complicated drugs we've ever made.”
Here's what Eli Lilly reported for the first quarter, compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Profit per share: $2.58 adjusted versus $2.46 expected
- Gain: $8.77 billion versus $8.92 billion expected
Eli Lilly posted first-quarter net income of $2.24 billion, or $2.48 per share. That compares with a profit of $1.34 billion, or $1.49 per share, a year earlier.
Excluding one-time items related to the value of intangible assets, among other adjustments, the company posted first-quarter 2024 earnings per share of $2.58.
The pharmaceutical giant posted revenues of $8.77 billion in the first quarter, up 26% year over year.
Shares of Eli Lilly rose nearly 7% in premarket trading on Tuesday. They're up 26% this year, after rising nearly 60% in 2023 due to insatiable demand for the company's weight loss and diabetes drugs. That's despite their high price tags, poor insurance coverage and periodic supply shortages.
With a market capitalization of approximately $700 billion, Eli Lilly is the largest pharmaceutical company in the US
Mounjaro, Trulicity Results
Both of the company's top-selling diabetes drugs fell short of Wall Street expectations for the first quarter.
Mounjaro generated revenue of $1.81 billion in the first quarter, more than triple the $568.5 million it posted in the year-earlier period. However, analysts had expected revenue of $2.11 billion, according to StreetAccount.
Eli Lilly said higher prices for Mounjaro helped boost sales, specifically citing the reduced use of savings card programs for the drug in the US.
But the company said the savings card dynamics “should no longer have a noticeable effect on the price comparisons achieved” because the $25 monthly coupon for patients who don't have insurance coverage for Mounjaro expired in June.
Meanwhile, sales of Eli Lilly's older diabetes drug Trulicity fell 26% to $1.46 billion during the first quarter. That is lower than the $1.59 billion that analysts had expected, according to StreetAccount.
In the US, declining sales were mainly due to supply constraints and competition with other diabetes treatments, Eli Lilly said. Sales outside the US also declined, driven by lower demand and realized prices, as well as tight supply.
Other drugs miss expectations
Sales growth was also driven by sales of Eli Lilly's breast cancer pill Verzenio, which rose 40% to $1.05 billion this quarter due to increased demand.
However, these results fell short of analyst expectations, which called for revenues of $1.11 billion for the period.
Sales of Jardiance, a tablet that lowers blood sugar levels in type 2 diabetes patients, rose 19% to $686.5 million in the first quarter. Analysts had expected sales of $718.3 million from Jardiance.
Jardiance, which Eli Lilly shares with Boehringer Ingelheim, is among the first 10 drugs selected for price negotiations with the federal Medicare program.