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Eli Lilly raised its revenue forecast for 2024, sending its shares soaring, as the world’s biggest drugmaker by market value continues to benefit from bumper sales of its blockbuster diabetes and weight loss drugs.
The Indianapolis-based company on Thursday increased its full-year sales guidance by $3bn to between $45.4bn and $46.6bn, citing the “strong performance of Mounjaro and Zepbound”, its new class of diabetes and weight loss medicines known as GLP-1s.
Revenue in the second quarter increased 36 per cent year on year to $11bn, while net income rose 68 per cent to $2.97bn, beating analysts’ expectations on both counts.
The sales boosts suggest that Eli Lilly has an edge over rival weight loss drugmaker Novo Nordisk in the race to boost manufacturing capacity to meet demand for a market that Goldman Sachs analysts estimate could be worth $130bn in peak annual sales. The Danish drugmaker’s sales came in below analyst expectations on Wednesday because of manufacturing challenges.
Eli Lilly chief executive David Ricks said the better than expected sales in its most recent quarter were driven by the GLP-1 medicines as the drugmaker “advanced our manufacturing expansion agenda” to meet the huge demand for the medicines. Increased pricing power for Mounjaro also boosted revenues, the company said.
Sales of new products, which include the GLP-1 medicines, rose $3.5bn to $4.5bn. Sales of diabetes drug Mounjaro totalled $3.1bn in the second quarter, while revenues from anti-obesity medication Zepbound reached $1.2bn.
Evan Seigerman, a pharma industry analyst at BMO Capital Markets, said the quarterly earnings suggested that Eli Lilly was besting Novo Nordisk and “pulling ahead in the metabolic duopoly”.
Eli Lilly’s shares jumped more than 9 per cent shortly after Wall Street’s opening bell on Thursday, taking the pharmaceutical group’s market capitalisation back above $800bn for the first time in a fortnight. The company’s share price has slid in recent weeks as a broader market rotation had investors flocking to cheaper pharmaceutical stocks and undervalued weight loss drugmakers such as Roche.
Last week, four different doses of Mounjaro and Zepbound were removed from a US Food and Drug Administration database tracking drug shortages in a sign that supply constraints have eased. The medicines were listed as “available”, but still remain on the agency’s shortages list.
Rival weight loss drugmaker Novo Nordisk, which manufactures diabetes drug Ozempic and its anti-obesity offshoot Wegovy, on Wednesday reported second-quarter sales that were slightly below analysts’ expectations. That provoked concerns from investors that it was being outmanoeuvred by Eli Lilly in the race to boost manufacturing capacity, resulting in Novo’s shares closing 6.7 per cent lower on the day.
BMO Capital Markets’ Seigerman said in a research note that Eli Lilly’s results were “impressive” and “reflect improving supply dynamics for the company’s [GLP-1] portfolio and higher realised prices for Mounjaro in the US.”
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