Biotech
Thursday, November 2nd, 2023 2:01 pm EDT
Key Points
- Strong Performance: Eli Lilly reported robust third-quarter results, exceeding Wall Street expectations. The company’s earnings per share were 10 cents, adjusted for one-time items, compared to an expected loss of 13 cents per share. Revenue for the quarter reached $9.50 billion, surpassing the anticipated $8.95 billion. This performance was primarily driven by strong demand for its diabetes drug, Mounjaro, along with other treatments.
- In-Process Research and Development Charges: Despite the strong revenue and earnings, Eli Lilly recorded substantial pretax “in-process research and development” charges of $2.98 billion in the third quarter. These charges were primarily related to recent acquisitions, including Dice Therapeutics, Versanis Bio, and Emergence Therapeutics, as part of the company’s business development efforts.
- Full-Year Profit Guidance Reduction: Due to the charges associated with recent acquisitions, Eli Lilly lowered its adjusted earnings guidance for the full year 2023. The new range is $6.50 to $6.70 per share, significantly reduced from the previous range of $9.70 to $9.90 per share. Despite this adjustment, the company reiterated its full-year revenue forecast of between $33.4 billion and $33.9 billion. Despite the reduced profit guidance, shares of Eli Lilly rose more than 7% in morning trading on the day of the announcement.
Eli Lilly reported its third-quarter results, showcasing robust demand for its diabetes drug, Mounjaro, which contributed to strong revenue and adjusted earnings. Here’s a breakdown of Eli Lilly’s third-quarter performance compared to Wall Street expectations:
- Earnings per share: Adjusted earnings of 10 cents per share vs. an expected loss of 13 cents per share.
- Revenue: $9.50 billion, surpassing the anticipated $8.95 billion.
In the third quarter, Eli Lilly experienced a loss of $57.4 million, equivalent to 6 cents per share, compared to a profit of $1.45 billion, or $1.61 per share, the previous year. Excluding one-time items, the company posted an adjusted profit of 10 cents per share. The pharmaceutical giant reported third-quarter revenue of $9.50 billion, marking a 37% increase compared to the same period in the previous year. This substantial growth was primarily driven by the strong performance of Mounjaro, along with other treatments such as the breast cancer pill Verzenio and the diabetes medication Jardiance. Additionally, the sale of one of its drug portfolios contributed to the revenue increase.
Eli Lilly recorded “in-process research and development” charges of $2.98 billion, mainly related to recent acquisitions, including Dice Therapeutics, Versanis Bio, and Emergence Therapeutics. This figure sharply contrasts with the $62.4 million in charges from the third quarter of the previous year.
Despite its strong performance, Eli Lilly lowered its adjusted earnings guidance for 2023, now expecting a range of $6.50 to $6.70 per share, compared to the previous range of $9.70 to $9.90 per share. However, the company reiterated its full-year revenue forecast of between $33.4 billion and $33.9 billion.
Eli Lilly’s shares surged more than 7% during morning trading, reflecting investors’ positive response to the strong results.
Eli Lilly’s remarkable revenue growth in the third quarter was primarily attributed to the remarkable success of Mounjaro, its Type 2 diabetes injection. Mounjaro generated $1.41 billion in sales for the quarter, indicating significant demand and higher realized prices due to decreased use of savings card programs. The majority of Mounjaro revenue came from the U.S., amounting to $1.28 billion.
Investors have high expectations for Mounjaro beyond treating diabetes, with early studies suggesting its effectiveness in reducing weight. Eli Lilly recently filed for FDA approval of Mounjaro for chronic weight management, with a decision expected in the fourth quarter.
Revenue growth was also driven by other key products, such as the breast cancer pill Verzenio, which saw a 68% increase in sales to $1.04 billion for the quarter, and the diabetes medication Jardiance, with sales climbing 22% to $700 million.
On a different note, Eli Lilly reported no sales from its Covid antibody treatments, compared to $387 million in the second quarter of 2022. The FDA withdrew its approval of the company’s antibody bebtelovimab in November.
Eli Lilly also updated its expectations for the FDA decision on its Alzheimer’s treatment, donanemab, now expected in the first quarter of 2024. The company remains confident in the approval process despite the delay, emphasizing it’s a matter of administrative procedures.
Eli Lilly is the largest pharmaceutical company in the U.S., with a market capitalization of approximately $526 billion. The company’s stock has shown strong performance, with shares up nearly 52% year-to-date.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/02/eli-lilly-lly-q3-earnings-report-2023.html
