Ely Lilly blows out expectations as demand for weight loss drugs remains high

Eli Lilly reported second-quarter earnings and revenue that significantly exceeded analyst expectations. The company posted adjusted earnings per share (EPS) of $3.92, compared to the forecasted $2.60, and revenue of $11.30 billion, surpassing the anticipated $9.98 billion. This impressive performance prompted the company to raise its full-year revenue guidance by $3 billion to a range of $45.4 billion to $46.6 billion, while also increasing its full-year EPS forecast to $16.10 to $16.60, up from the previous range of $13.50 to $14.00.

The standout contributors to Eli Lilly’s robust results were its diabetes drug Mounjaro and the weight loss injection Zepbound. Mounjaro generated $3.09 billion in revenue, significantly higher than the expected $2.37 billion. Similarly, Zepbound reported $1.24 billion in sales, well above the analyst estimate of $818.9 million. These two drugs alone were pivotal in driving the company’s performance and guiding its optimistic outlook for the remainder of the year.

Mounjaro, in particular, has become a blockbuster product for Eli Lilly. This diabetes medication has also shown promising results as a weight loss treatment, contributing to its soaring demand. The U.S. market has seen increased access to Mounjaro, partly due to reduced reliance on savings card programs. CEO David Ricks highlighted that the company has ramped up production significantly to meet this growing demand, with supply levels expected to be 50% higher in the second half of 2024 compared to the previous year.

Zepbound, a relatively new entrant to the market, has quickly established itself as a major revenue driver. Approved in November, this weight loss injection has seen strong uptake, reflecting the high demand for effective weight management solutions. Eli Lilly’s investment in expanding its manufacturing capacity has paid off, allowing the company to improve supply and capitalize on the high demand. Despite previous supply challenges, the FDA’s recent update indicated that all doses of Zepbound are now available in the U.S.

Looking ahead, Eli Lilly has raised its guidance based on the strong performance of Mounjaro and Zepbound. The company now expects full-year revenue between $45.4 billion and $46.6 billion, a significant increase from its earlier forecast. The revised EPS guidance of $16.10 to $16.60 reflects the company’s confidence in sustaining its growth momentum. The guidance increase also stems from better visibility into production expansions and the planned launches of Mounjaro outside the U.S.

Despite these positive results, Eli Lilly remains cautious about potential supply constraints due to the continued high demand for its incretin drugs. CEO David Ricks noted the company’s efforts to build additional manufacturing plants and hire more workers to ensure a steady supply. The company is also developing more convenient weight loss pills to cater to the rising demand and broaden its product portfolio.

In conclusion, Eli Lilly’s second-quarter performance highlights the company’s strategic focus on expanding its diabetes and weight loss drug offerings. The strong demand for Mounjaro and Zepbound has driven significant revenue growth and led to an optimistic outlook for the full year. With continued investments in production capacity and new product launches, Eli Lilly is well-positioned to maintain its growth trajectory and meet the evolving needs of its customers.