Drugmaker’s stock surges as Mounjaro and Zepbound drive growth
- Eli Lilly’s stock jumps 7% after reporting higher-than-expected Q1 profit
- Strong sales of Mounjaro and Zepbound contribute to the company’s success
- First-quarter revenues reach $8.768 billion, up 26% from last year
- Lilly raises its full-year 2024 sales and profit guidance
- Supply shortages of tirzepatide may impact short-term stock performance
Eli Lilly & Co. shares gained 7% premarket on Tuesday after the company reported first-quarter profit that topped analyst expectations amid strong sales of diabetes drug Mounjaro and weight-loss treatment Zepbound. The drugmaker reported net income of $2.243 billion, or $2.48 per share, up from $1.345 billion, or $1.49 per share, in the year-earlier period. Adjusted earnings per share came to $2.58 in the quarter, up from $1.62 a year earlier and beating the FactSet consensus of $2.47. First-quarter revenues totaled $8.768 billion, up 26% from a year earlier but below the FactSet consensus of $8.935 billion. Mounjaro generated sales of $1.806 billion in the quarter, up from $569 million a year earlier, while Zepbound, which was approved by the FDA late last year, posted sales of $517 million. Lilly’s revenue miss in the quarter "reflects a lack of capacity, rather than a problem with Lilly product demand," BMO Capital Markets analyst Evan David Seigerman said in a note Tuesday. Ongoing shortages of tirzepatide, the active ingredient in Mounjaro and Zepbound, could make Lilly shares choppy in the short term, some analysts say. All but the lowest dose of Mounjaro and Zepbound injections now have limited availability through the second quarter of this year, according to the Food and Drug Administration’s drug-shortage database. Lilly Chief Executive David Ricks said in a statement Tuesday that the company is "rapidly expanding manufacturing capacity to make our incretin medicines available to more patients." This year’s most significant production increases are expected in the second half, the company said. In its earnings presentation, Lilly was upbeat about insurance coverage of Zepbound. The company said it is working to broaden access on formularies, or lists of covered drugs, and sees "encouraging" early progress in employers opting in to cover the drug. Breast-cancer treatment Verzenio generated $1.05 billion in sales in the quarter, up 40% from a year earlier, but fell short of the FactSet consensus of $1.127 billion. Sales of diabetes drug Jardiance climbed 19%, to $687 million, but sales of Trulicity, another top-selling diabetes treatment, dropped 26%, to $1.456 billion, amid supply constraints and competitive dynamics, Lilly said. Lilly raised its full-year 2024 sales and profit guidance. The company now expects 2024 sales in the range of $42.4 billion to $43.6 billion, and adjusted earnings per share in the range of $13.50 to $14.00. Lilly shares LLY, +0.50% have gained 26.5% in the year to date, while the S&P 500 is up 7.3%.
Factuality Level: 8
Factuality Justification: The article provides specific details about Eli Lilly & Co.’s financial performance, including net income, earnings per share, and revenue. It also includes quotes from analysts and company executives to provide context. The information presented is factual and based on reported data.
Noise Level: 2
Noise Justification: The article provides a detailed and focused analysis of Eli Lilly & Co.’s first-quarter performance, including financial results, product sales, and future projections. It offers insights into the company’s challenges and strategies, such as manufacturing capacity expansion and insurance coverage efforts. The information is relevant, supported by data, and stays on topic without unnecessary repetition or irrelevant details.
Financial Relevance: Yes
Financial Markets Impacted: Eli Lilly & Co. shares
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to financial topics as it discusses the first-quarter profit of Eli Lilly & Co. and its impact on the company’s shares. However, there is no mention of any extreme event.
Public Companies: Eli Lilly & Co. (LLY)
Key People: David Ricks (Chief Executive), Evan David Seigerman (Analyst at BMO Capital Markets)
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