Eli Lilly (LLY) Q1 2024 results

Eli Lilly on Tuesday reported adjusted first-quarter profit that beat Wall Street expectations and raised its full-year forecast on strong sales of its blockbuster diabetes drug Mounjaro and newly launched weight-loss drug Zepbound.

The drugmaker now expects full-year adjusted earnings of $13.50 to $14.00 per share, up from its previous forecast of $12.20 to $12.70 per share. Eli Lilly also expects annual revenue to be between $42.4 billion and $43.6 billion, up $2 billion at each ends of the range.

Analysts surveyed by LSEG expected full-year adjusted earnings of $12.50 per share and revenue of $41.44 billion.

The company said the increased guidance was due partly to optimism about increased production of Zepbound, Mounjaro and similar drugs for the rest of the yr.

“Now that we are four months into the year, we have better insight into these capacity nodes and are more confident,” Eli Lilly CFO Anat Ashkenazi told investors during a conference call Tuesday.

She noted that Eli Lilly has several manufacturing sites which are either “ramped up or under construction,” including two sites in North Carolina, two in Indiana, one in Ireland and one in Germany, in addition to a seventh site for the corporate recently acquired from Nexus Pharmaceuticals.

Eli Lilly said demand for Mounjaro and Zepbound – treatments generally known as incretin drugs that mimic hormones produced within the gut to suppress an individual’s appetite and regulate their blood sugar – outpaced increases in supply through the quarter . And the corporate expects supply to stay “fairly tight” within the short to medium term as a result of continued demand for these drugs, Ashkenazi said.

However, Eli Lilly expects probably the most significant production increases within the second half of the yr, she noted.

“Our top priority is to make more products, and we’re doing everything we can to make that happen,” Eli Lilly CEO David Ricks said in an interview Tuesday on CNBC’s “Squawk Box.” “We are pushing this forward aggressively. But it is capital intensive, technically complex and highly regulated.”

The results and guidance increase reflect Zepbound’s first full quarter within the U.S. market after the corporate received regulatory approval in early November. The drug posted first-quarter sales of $517.4 million, despite shortages of most doses of the drug within the U.S. which are expected to last through June.

Analysts expect the weekly shot could generate greater than $1 billion in sales in its first yr in the marketplace and potentially turn into the largest drug ever.

Here’s what Eli Lilly reported for First quarter in comparison with Wall Street expectations based on an analyst survey by LSEG:

• Earnings per share: $2.58 adjusted vs. $2.46 expected
• Revenue: $8.77 billion versus expected $8.92 billion

Eli Lilly posted first-quarter net income of $2.24 billion, or $2.48 per share. That compares with profit of $1.34 billion, or $1.49 per share, last yr.

Excluding one-time items related to the worth of intangible assets and other adjustments, the corporate reported first-quarter 2024 earnings per share of $2.58.

The pharmaceutical giant posted first-quarter revenue of $8.77 billion, up 26% year-over-year.

Shares of Eli Lilly rose greater than 5% on Tuesday. The stock is up 26% this yr after rising nearly 60% in 2023 on insatiable demand for the corporate’s weight-loss and diabetes drugs. And this despite the high prices, the patchy insurance coverage and the temporary delivery bottlenecks.

With a market capitalization of around $700 billion, Eli Lilly is the most important pharmaceutical company based within the United States

Both of the corporate’s top-selling diabetes drugs fell wanting Wall Street expectations in the primary quarter.

Mounjaro posted first-quarter revenue of $1.81 billion, greater than triple the $568.5 million in the identical period last yr. However, analysts expected revenue of $2.11 billion, in response to StreetAccount.

Eli Lilly said higher prices for Mounjaro helped boost sales, citing specifically lower use of savings card programs for the drug within the United States

However, the corporate said this savings card dynamic “should not have a significant impact on realized price comparisons” because the $25 monthly coupon for patients who don’t have Mounjaro coverage expired in June.

“We should expect typical Mounjaro pricing starting in the second half of the year,” said Patrik Jonsson, executive vice chairman of diabetes and obesity at Eli Lilly, through the call Tuesday.

Meanwhile, sales of Eli Lilly’s older diabetes drug Trulicity fell 26% to $1.46 billion in the primary quarter. That’s lower than the $1.59 billion analysts were expecting, in response to StreetAccount.

According to Eli Lilly, the declining sales within the US were mainly as a result of supply shortages and competition from other diabetes treatments. Sales outside the U.S. also declined, reflecting lower demand and realized prices in addition to tight supply.

Sales growth was also driven by sales of Eli Lilly’s breast cancer pill Verzenio, which rose 40% to $1.05 billion within the quarter as a result of increased demand.

However, those results fell wanting analysts’ expectations, who forecast revenue of $1.11 billion for the period.

Sales of Jardiance, a pill that lowers blood sugar in patients with type 2 diabetes, rose 19% to $686.5 million in the primary quarter. Analysts had expected Jardiance to report sales of $718.3 million.

Jardiance, which Eli Lilly shares with Boehringer Ingelheim, is among the many first 10 drugs chosen for price negotiations with the federal Medicare program.