What caused LLY's Q2 2024 earnings to exceed forecasts?

Eli Lilly's Q2 2024 earnings exceeded forecasts due to several key factors:

1. Strong Sales of Mounjaro and Zepbound: These two drugs were the primary drivers of revenue growth. Mounjaro, used for diabetes and obesity, saw global sales of $1.81 billion in Q1 2024, up from $1.26 billion in the previous year's same quarter. Zepbound, specifically for obesity, had sales of $1.26 billion in Q4 2024, surpassing analysts' expectations. The growth in these drugs' sales reflects their significant market demand and Eli Lilly's successful positioning in the weight loss and diabetes markets.
2. Market Expansion and Partnerships: The company's expansion into new markets, such as the launch of Mounjaro in India, has opened up new avenues for growth. Partnerships with Indian pharma firms to market Mounjaro are expected to strengthen its presence and demand in the region. These strategic moves enable Eli Lilly to capitalize on the rising demand for its products in new and existing markets.
3. Pricing Strategies: Eli Lilly has adjusted pricing for different regions to make its products more accessible and affordable. For instance, in India, Mounjaro is priced significantly lower than in the US, which has led to strong demand. Similarly, Zepbound's pricing adjustments, such as the launch of 7.5 mg and 10 mg vials for $499, have made higher doses more accessible to patients. These pricing strategies have helped to increase patient affordability and uptake of the drugs.
4. Manufacturing Capacity Expansion: Eli Lilly has invested over $23 billion since 2020 to expand manufacturing capacity in multiple locations, directly supporting the increasing demand for its products. This investment ensures adequate supply to meet market demand, which is crucial for maintaining revenue growth.
5. New Product Pipeline: The company's commitment to enhancing its product pipeline through acquisitions and collaborations, such as with Morphic Therapeutics and OpenAI, suggests a forward-looking strategy to sustain and boost revenue. The approval of Omvoh for Crohn's disease is another example of successful product diversification.

In summary, Eli Lilly's Q2 2024 earnings exceeded forecasts due to strong sales of its key drugs, market expansion, strategic pricing, manufacturing capacity expansion, and a promising product pipeline. These factors collectively contribute to the company's robust revenue growth and profitability.