Eli Lilly, the US pharmaceutical giant, has raised its annual guidance following a significant increase in sales of its diabetes and weight-loss drugs, Mounjaro and Zepbound. The well-regarded Indianapolis drug manufacturer now anticipates annual revenue to be between $42.4 billion and $43.6 billion, which represents a $2 billion increase on both ends from the earlier forecast. This increase comes on the back of a 26% surge in first-quarter revenue and the forthcoming availability of greater production capacity for its weight loss drugs.
Investor interest in these new type of drugs, known as GLP-1s, is high. Analysts speculate that these could bring in more than $100 billion in yearly sales by decade end. This has surged Eli Lilly’s market value beyond $700 billion, establishing it as the world’s largest pharmaceutical group by market capitalisation.
On Tuesday, Eli Lilly’s share price rose by more than 7% soon after Wall Street began trading, leading to an almost 36% rise in the year-to-date gain. Conversely, shares of Denmark’s Novo Nordisk, which produces competitors such as Ozempic and Wegovy, saw an increase of over 28% in 2024.
Eli Lilly outperformed analysts’ estimates for its first-quarter earnings per share at $2.58, over the expected $2.47. However, the $8.77 billion first-quarter revenues were below projections as the company struggled to meet the high demand for GLP-1s due to limited production capacity. Eli Lilly employs 3,000 people in the Republic.
David Ricks, Eli Lilly’s chief executive, credited the company’s success to the robust sales of Mounjaro and Zepbound. He noted the firm’s quick expansion of manufacturing capacity to cater to a broader patient demographic. In the recent past, Eli Lilly announced an agreement to acquire a Wisconsin-based production facility from Nexus Pharmaceuticals to fill its injectable pens.
In addition, the company has also started construction of a new establishment in Germany. Previously, the Financial Times reported that Eli Lilly had collaborated with contract manufacturers BSP Pharmaceuticals and Resilience to assemble and complete its pens.
The US Food and Drug Administration’s database indicates that almost all dosages of Mounjaro, a medication for type 2 diabetes, and Zepbound, a weight loss drug, are likely to be in limited supply until the close of Q2 this year. Eli Lilly, the producer of these drugs, has stated that it has plans to boost its manufacturing capabilities, with the substantial expansions in production expected to occur in the latter half of 2024.
In the first quarter of the year, sales of Eli Lilly’s new products significantly increased by $1.79 billion from the previous year, reaching $2.39 billion, spurred by both Mounjaro and Zepbound. The first quarter saw sales of Zepbound amounting to $517.4 million, surpassing projections by 33 percent. However, Mounjaro’s sales of $1.8 billion fell short of forecasts.
According to Evan Seigerman, an analyst from BMO Capital Markets, the shortfall in Mounjaro’s sales is largely caused by supply constraints as production is likely shifted towards Zepbound in the first quarter. The analyst’s commentary was enclosed in a note outlined in The Financial Times Limited 2024 copyright material.