Eli Lilly rises after earnings, sales blow past Wall Street’s expectations
The company sold $6.5 billion worth of Mounjaro in this most recent quarter, $1 billion more than the Street was expecting.
Eli Lilly rose after it reported earnings and revenue that beat Wall Street expectations, driven by better-than-expected sales of its blockbuster diabetes shot Mounjaro.
The company reported adjusted earnings per share of $7.02, compared to the $5.89 analysts polled by FactSet were expecting. It also reported $17.6 billion in sales, versus the $16 billion the Street was penciling in. Both its top- and bottom-line results were better than every analyst polled by Bloomberg had projected.
The drugmaker’s sales growth is largely driven by its diabetes and weight-loss shots, Mounjaro and Zepbound. The company sold $6.5 billion worth of Mounjaro in the latest quarter, $1 billion more than the Street was expecting.
Lilly raised its full-year adjusted profit outlook to between $23 and $23.70 per share, up from its previous guidance of $21.75 to $23 a share. It now expects annual revenue to hit between $63 billion and $63.5 billion, up from its previous guidance of $60 billion to $62 billion.
Tirzepatide, the active ingredient in Lilly's Mounjaro and Zepbound, is now the most-sold medicine in the world, surpassing Merck’scancer therapy, Keytruda, this year.
But despite having some of the bestselling pharmaceuticals on the market, the company is underperforming the broader market for the year, as uncertainty over tariffs and drug pricing roils the industry.
The company has doubled down on direct-to-consumer sales for Zepbound, its popular weight-loss drug that is often not covered by insurance. It offers cheaper cash-pay versions for patients bypassing insurance, and Wednesday announced it would partner with Walmart to distribute the drug.
Brian Mulberry, a portfolio manager at Zacks Investment Management, said that while Lilly's fundamentals are solid, expectations remain high. In its last quarterly report, its earnings beat was overshadowed by trial results that disappointed Wall Street.
"For an investor, this appears like a growth-at-a-premium story: the rewards could be substantial if execution remains strong and the pipeline delivers, but the risks are elevated given high expectations and external headwinds," Mulberry said.
The search for the next blockbuster weight-loss drug is well underway, with Lilly, Novo and several others working on new injectables and the next frontier: pills, which are cheaper to manufacture and could be more inviting for those scared of needles.
Meanwhile, Novo andPfizer are in a bidding war for Metsera, a small biotech working on next-gen GLP-1s.
