Eli Lilly blows past estimates, hikes guidance as Zepbound, Mounjaro sales soar

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 loss injection Zepbound spike.

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

The drugmaker now expects revenue for the year to come in between $45.4 billion and $46.6 billion, an increase of $3 billion at both ends of the range.

The company also raised its full-year adjusted earnings to a range 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 comes in part due to “improved clarity” into the company’s production expansions and planned launches of Mounjaro outside the U.S. The company said it hit several supply related milestones during the quarter, without providing specific details.

Demand has far outstripped supply for incretin drugs such as Zepbound and Mounjaro, which mimic hormones produced in the gut to suppress a person’s appetite and regulate their blood sugar. That has forced Eli Lilly and its rival Novo Nordisk to invest heavily to boost manufacturing.

But Eli Lilly’s supply woes may be starting to ease. On Friday, the Food and Drug Administration’s drug database said all doses of Zepbound and Mounjaro are available in the U.S. after extended shortages.

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

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

Ricks said the company has built six manufacturing plants, some of which are already ramping up, and hired thousands of workers to increase production. Eli Lilly expects incretin drug production in the second half of 2024 to be 50% higher than it was during the same period last year, he noted.  

“We’re on that kind of ramp into 2025,” he said. Ricks added that Eli Lilly is still developing more convenient weight loss pills, which could help the company 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 year earlier. 

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

The company posted second-quarter revenue of $11.30 billion, up 36% from the same period a year ago. 

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

It is 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, according to StreetAccount. 

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

Meanwhile, Mounjaro took in $3.09 billion in revenue for the second quarter, more than triple the sales it booked during the year-earlier period. Analysts expected $2.39 billion in sales, according to StreetAccount.

Mounjaro prices were higher in the U.S. during the second quarter, which came in part due to greater access to the drug and decreased use of savings card programs compared with the year-earlier period. 

But the company said savings cards should have “minimal effect” on realized price comparisons in the second half of the year because the $25 monthly coupon for patients who don’t have insurance coverage for Mounjaro expired in June. 

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

During the call, executives also said the company expects stable pricing sequentially across quarters this year, with no unusual trends.

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

Revenue from Wegovy was hit by higher-than-expected price concessions to U.S. pharmacy benefit 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 more than 30% this year after jumping almost 60% in 2023 due to the soaring demand for the company’s weight loss and diabetes drugs – and increased investor interest in 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 more than $730 billion, Eli Lilly is the largest pharmaceutical company based in the U.S.