Biotech
Tuesday, February 6th, 2024 6:16 pm EDT
Key Points
- Strong financial performance: Eli Lilly reported fourth-quarter revenue and adjusted earnings exceeding expectations, attributed to the successful launch of Zepbound and increased prices for Mounjaro, its diabetes treatment.
- Growth prospects: With Zepbound sales hitting $175.8 million in the fourth quarter and analysts predicting potential billion-dollar sales in its first year, Eli Lilly anticipates accelerated revenue growth, particularly in the second half of 2024, driven by increased availability of its incretin drugs.
- Market dynamics and product portfolio: Higher prices for older drugs like Mounjaro contributed to revenue growth, alongside sales increases in other key products like Verzenio and Jardiance, though not meeting all analyst expectations. The company offset higher prices with decreased prices for other diabetes medications like Trulicity and Humalog.
Eli Lilly’s fourth-quarter earnings and revenue surpassed expectations, driven by the successful launch of its new weight loss drug, Zepbound, and increased prices for its diabetes treatment, Mounjaro. Zepbound, approved by U.S. regulators in November, generated $175.8 million in sales, with analysts predicting it could reach over a billion dollars in sales in its first year, potentially becoming a record-breaking drug. Despite these positive results, Eli Lilly’s stock fell over 1% following the announcement, despite a 60% surge in the previous year. The company’s market cap stands at approximately $673 billion, making it the largest pharmaceutical company in the U.S. The fourth-quarter results outperformed Wall Street expectations, with adjusted earnings per share at $2.49 compared to an expected $2.22, and revenue at $9.35 billion compared to an expected $8.93 billion. Net income for the quarter was $2.19 billion, or $2.42 per share, compared to $1.94 billion, or $2.14 per share, a year earlier, excluding one-time items. Looking ahead to 2024, Eli Lilly forecasts adjusted earnings of $12.20 to $12.70 per share and revenue of $40.4 billion to $41.6 billion.
Eli Lilly anticipates strong revenue growth in the second half of 2024, driven by increased availability of its incretin drugs, such as Mounjaro and Zepbound, which mimic gut hormones to suppress appetite and regulate blood sugar. The company expects demand for these drugs to surpass supply, despite doubling production capacity by the end of 2023. Efforts to expand production include a new manufacturing site in Concord, North Carolina, set to initiate production by the end of 2024. Higher prices for older drugs like Mounjaro contributed to revenue growth, with sales reaching $2.21 billion for the quarter, reflecting increased demand and higher realized prices in the U.S. Eli Lilly expects a decline in drug prices in 2024, particularly in the second half of the year.
Revenue growth was also driven by sales of Verzenio, a breast cancer pill, which rose 42% to $1.15 billion, and Jardiance, a diabetes medication, which climbed 30% to $798.1 million for the quarter. However, sales of Trulicity, another diabetes drug, fell 14% to $1.67 billion, and Humalog, an insulin product, saw a 33% decrease to $366.6 million in revenue. This decline was anticipated, as Eli Lilly had announced price cuts for Humalog and another insulin product the previous year. The company reiterated expectations for an FDA decision on its experimental Alzheimer’s drug, donanemab, in the first quarter of 2024, which has shown promise in slowing the progression of the disease.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/06/eli-lilly-lly-earnings-q4-2023.html
