Eli Lilly, the pharmaceutical giant, has reported impressive second-quarter earnings and revenue that surpassed expectations. This performance has led the company to increase its full-year revenue outlook by $3 billion. The surge in revenue can be attributed to the strong sales of its blockbuster diabetes drug, Mounjaro, and weight loss injection, Zepbound.
The news of Eli Lilly’s strong performance has caused its shares to soar by more than 9% in premarket trading. The company now expects adjusted earnings for the full year to be between $16.10 and $16.60 per share, up from the previous guidance of $13.50 to $14 per share. Additionally, Eli Lilly anticipates revenue for the year to range from $45.4 billion to $46.6 billion, marking a $3 billion increase at both ends of the range.
The improved guidance is primarily driven by the outstanding performance of Mounjaro and Zepbound. Furthermore, the company cites “improved clarity” into its production expansions and planned launches of Mounjaro outside the U.S. as contributing factors. Eli Lilly has achieved several supply-related milestones during the quarter, although specific details have not been provided.
Incretin drugs such as Zepbound and Mounjaro, which mimic gut hormones to suppress appetite and regulate blood sugar, have experienced a significant demand that has outpaced supply. As a result, Eli Lilly and its competitor Novo Nordisk have made substantial investments to bolster manufacturing capabilities. However, there are signs that Eli Lilly’s supply challenges may be easing. The Food and Drug Administration’s drug database recently confirmed the availability of all doses of Zepbound and Mounjaro in the U.S. following extended shortages.
Eli Lilly’s CEO, David Ricks, expressed astonishment at the overwhelming demand for the drugs, stating that the company wasn’t even exerting much effort in marketing them. He attributed the high demand to organic consumer interest as more products are shipped and made available for online purchase in the United States. To meet this demand, Eli Lilly has constructed six manufacturing plants, some of which are already increasing production, and has hired thousands of workers.
In the second quarter, Eli Lilly reported earnings per share of $3.92, surpassing Wall Street expectations of $2.60. The company generated revenue of $11.30 billion, a 36% increase compared to the same period last year. The surge in sales can be largely attributed to the higher demand for Mounjaro and Zepbound, as production increases have improved supply in the U.S.
Zepbound, which received regulatory approval in November, recorded $1.24 billion in sales for the quarter, surpassing analysts’ expectations of $922.2 million. Meanwhile, Mounjaro generated $3.09 billion in revenue, more than triple the sales from the previous year. Analysts had anticipated $2.39 billion in sales. These strong sales figures have contributed to the significant increase in Eli Lilly’s stock price, which has risen by over 30% this year and nearly 60% in 2023.
Despite the success of these drugs, they face challenges such as high monthly costs, inconsistent insurance coverage, and intermittent supply shortages. However, the soaring demand and increased investor interest in their potential as treatments for other health conditions have propelled Eli Lilly’s market cap to over $730 billion. This makes it the largest pharmaceutical company based in the U.S.
Overall, Eli Lilly’s impressive earnings and revenue performance, driven by the success of Mounjaro and Zepbound, highlight the company’s strong position in the pharmaceutical industry. With its continued focus on expanding production and meeting demand, Eli Lilly is well-positioned for further growth and success in the future.
