Eli Lilly, the pharmaceutical company, reported higher-than-expected profits in the first quarter of 2024, driven by the increased sales of its new obesity drug Zepbound and its diabetes counterpart Mounjaro. The company also raised its sales and earnings forecast for the year, surpassing Wall Street’s expectations. However, Lilly is currently facing supply issues that are impacting its manufacturing capabilities, but they are confident that these challenges will be resolved soon, with significant manufacturing increases expected in the latter half of the year. CEO David Ricks described this as the most ambitious expansion plan in the company’s history.
The sales of Zepbound and Mounjaro contributed to a 26% rise in total revenue for the company, reaching $8.77 billion in the first quarter. Despite the overall positive performance, there was a 26% decrease in sales for Trulicity, a diabetes treatment, due to supply constraints. Lilly also reported higher research and development expenses, including a charge for ending research into using Verzenio, a breast cancer treatment, as a potential prostate cancer treatment. The company is currently focused on seeking regulatory approval for a potential Alzheimer’s disease treatment and expanding the use of tirzepatide, the molecule behind Mounjaro and Zepbound.
Overall, Lilly’s net income increased by 67% to $2.24 billion in the first quarter, with adjusted earnings per share totaling $2.58. This exceeded Wall Street’s expectations of $2.47 per share. For the full year, Lilly raised its forecasted range for adjusted earnings per share to between $13.50 and $14, more than doubling the company’s earnings from 2023. The company also increased its full-year revenue guidance by $2 billion, now expecting a range of $42.4 billion to $43.6 billion. Shares of Lilly saw a significant increase of nearly 5% to $772.49 in midday trading, with the stock already climbing 26% so far in 2024 and reaching a new all-time high in early March.
Looking ahead, Lilly is focused on resolving its supply issues and ramping up manufacturing to meet the growing demand for its key drugs, Zepbound and Mounjaro. The company’s expansion plan is aimed at addressing these challenges and ensuring a steady supply of medications to patients. With the success of these new drugs driving profits and revenue growth, Lilly is optimistic about its financial performance for the rest of the year. The company’s efforts to seek regulatory approval for new treatments and expand the use of existing drugs demonstrate its commitment to innovation and meeting the healthcare needs of patients worldwide. Investors and analysts are closely watching Lilly’s progress as it navigates the evolving pharmaceutical landscape and capitalizes on the growing market for innovative healthcare solutions.
