Eli Lilly (LLY) earnings Q2 2024

Eli Lilly on Thursday reported second-quarter earnings and revenue that blew past expectations and hiked its full-year revenue outlook by $3 billion as sales of its blockbuster diabetes drug Mounjaro and weight reduction injection Zepbound spike.

Shares of Eli Lilly jumped greater than 7% on Thursday.

The drugmaker now expects revenue for the 12 months to are available between $45.4 billion and $46.6 billion, a rise of $3 billion at each ends of the range.

The corporate also raised its full-year adjusted earnings to a variety of $16.10 to $16.60, up from a previous guidance of $13.50 to $14 per share.

Eli Lilly said the guidance increase was primarily driven by the strong performance of Mounjaro and Zepbound and is available in part attributable to “improved clarity” into the corporate’s production expansions and planned launches of Mounjaro outside the U.S. The corporate said it hit several supply related milestones through the quarter, without providing specific details.

Demand has far outstripped supply for incretin drugs reminiscent of Zepbound and Mounjaro, which mimic hormones produced within the gut to suppress an individual’s appetite and regulate their blood sugar. That has forced Eli Lilly and its rival Novo Nordisk to take a position heavily to spice up manufacturing.

But Eli Lilly’s supply woes could also be beginning to ease. On Friday, the Food and Drug Administration’s drug database said all doses of Zepbound and Mounjaro can be found within the U.S. after prolonged shortages.

Still, the corporate cautioned that expected increases in demand may lead to periodic “supply tightness” for certain doses of its incretin drugs. 

“We just see unbelievable demand, and we’re not even trying that arduous to advertise this drug,” Eli Lilly CEO David Ricks told CNBC in an interview. “What you are seeing is just consumer organic demand here as we have shipped more product, as we bring more supply online in the USA.” 

Ricks said the corporate has built six manufacturing plants, a few of that are already ramping up, and hired hundreds of employees to extend production. Eli Lilly expects incretin drug production within the second half of 2024 to be 50% higher than it was through the same period last 12 months, he noted.  

“We’re on that sort of ramp into 2025,” he said. Ricks added that Eli Lilly continues to be developing more convenient weight reduction pills, which could help the corporate meet skyrocketing demand.

Here’s what Eli Lilly reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• Earnings per share: $3.92 adjusted vs. $2.60 expected
• Revenue: $11.30 billion vs. $9.92 billion expected

The pharmaceutical giant booked net income of $2.97 billion, or $3.28 a share, for the second quarter. That compares with a profit of $1.76 billion, or $1.95 a share, a 12 months earlier. 

Excluding one-time items related to the worth of intangible assets and other adjustments, Eli Lilly posted earnings of $3.92 per share for the second quarter of 2024.

The corporate posted second-quarter revenue of $11.30 billion, up 36% from the identical period a 12 months ago. 

Eli Lilly said sales were largely driven by higher demand for Mounjaro and Zepbound as production increases improved supply within the U.S.

It’s Zepbound’s second full quarter on the U.S. market after winning approval from regulators in November. The weekly injection raked in $1.24 billion in sales for the period, which is well above the $922.2 million that analysts expected, in accordance with StreetAccount. 

As of July 1, Zepbound was available on about 86% of the industrial insurance coverage lists within the U.S., Eli Lilly executives said during an earnings call Thursday. That is up from 67% as of April 1, in accordance with a first-quarter earnings presentation.

Meanwhile, Mounjaro took in $3.09 billion in revenue for the second quarter, greater than triple the sales it booked through the year-earlier period. Analysts expected $2.39 billion in sales, in accordance with StreetAccount.

Mounjaro prices were higher within the U.S. through the second quarter, which got here partly attributable to greater access to the drug and decreased use of savings card programs compared with the year-earlier period. 

But the corporate said savings cards must have “minimal effect” on realized price comparisons within the second half of the 12 months since the $25 monthly coupon for patients who do not have insurance coverage for Mounjaro expired in June. 

Ricks told CNBC that pricing of Eli Lilly’s incretin drugs was “pretty stable” through the second quarter. 

In the course of the call, executives also said the corporate expects stable pricing sequentially across quarters this 12 months, with no unusual trends.

That differs from Novo Nordisk, which reported weaker-than-expected second-quarter sales of its weight reduction drug Wegovy and diabetes injection Ozempic on Wednesday partly attributable to pricing pressure. 

Revenue from Wegovy was hit by higher-than-expected price concessions to U.S. pharmacy profit managers, which negotiate drug discounts with manufacturers on behalf of insurers, Novo Nordisk executives said on an earnings call Wednesday.

Shares of Eli Lilly are up greater than 30% this 12 months after jumping almost 60% in 2023 attributable to the soaring demand for the corporate’s weight reduction and diabetes drugs – and increased investor interest of their potential as treatments for other health conditions. That popularity comes despite their hefty monthly price tags, inconsistent insurance coverage and intermittent supply shortages. 

With a market cap of greater than $730 billion, Eli Lilly is the most important pharmaceutical company based within the U.S.