Eli Lilly, the largest pharmaceutical company in the U.S., has reported strong fourth-quarter results driven by the successful launch of its new weight loss drug, Zepbound, and higher prices for its blockbuster diabetes drug, Mounjaro. The company’s revenue and adjusted earnings exceeded expectations, leading to a 5% increase in Eli Lilly’s stock price during premarket trading.
Zepbound, which received approval from U.S. regulators in November, generated $175.8 million in sales for the fourth quarter. Analysts predict that the drug could surpass a billion dollars in sales in its first year on the market and potentially become the biggest drug of all time.
Eli Lilly’s net income for the fourth quarter was $2.19 billion, or $2.42 per share, compared to $1.94 billion, or $2.14 per share, in the previous year. Excluding one-time items, the company’s per-share profit was $2.49 cents for the fourth quarter of 2023. The pharmaceutical giant also reported a 28% increase in fourth-quarter revenue, reaching $9.35 billion.
Looking ahead to 2024, Eli Lilly issued a full-year forecast that aligns with expectations. The company expects adjusted earnings of $12.20 to $12.70 per share and revenue of $40.4 billion to $41.6 billion. Analysts had anticipated adjusted earnings of $12.43 per share and sales of $39.38 billion.
The surge in Eli Lilly’s stock price last year can be attributed to the growing popularity of weight loss drugs, despite their high costs and potential side effects. With a market capitalization of approximately $673 billion, Eli Lilly remains a dominant force in the pharmaceutical industry.
The success of Mounjaro, Eli Lilly’s diabetes drug, played a significant role in driving up the company’s revenue. Sales for Mounjaro reached $2.21 billion in the fourth quarter, compared to just $279.2 million in the same period the previous year. Analysts had estimated worldwide sales of $1.73 billion for the drug.
The increase in demand for Mounjaro can be attributed to higher realized prices in the U.S., resulting from decreased use of Eli Lilly’s savings card programs. These programs aim to reduce out-of-pocket costs for patients. Additionally, sales of Eli Lilly’s breast cancer pill, Verzenio, rose by 42% to $1.15 billion due to increased demand and higher prices, although this fell slightly below analysts’ expectations.
Sales of Jardiance, a tablet that lowers blood sugar in Type 2 diabetes patients, also saw a 30% increase to $798.1 million for the fourth quarter. However, this figure was slightly lower than the projected $771.8 million in sales. Jardiance is among the first 10 drugs selected for price negotiations with the federal Medicare program.
While Eli Lilly experienced success with some of its drugs, others faced challenges. Trulicity, another diabetes medicine, reported a revenue of $1.67 billion, a 14% decrease from the previous year. Humalog, an insulin product, saw a 33% decline in revenue to $366.6 million. This decrease was expected as Eli Lilly had announced a 70% price reduction for Humalog and another commonly prescribed insulin.
Investors will be eager to hear more about Eli Lilly’s progress in addressing supply issues with its weight loss and diabetes drugs during the earnings call scheduled for Tuesday. There may also be questions regarding the timing of the FDA’s decision on Eli Lilly’s experimental Alzheimer’s drug, donanemab, which has shown promising results in slowing the progression of the disease.
Overall, Eli Lilly’s strong fourth-quarter results demonstrate the company’s ability to capitalize on the success of its new weight loss drug and higher prices for its diabetes medication. With a positive outlook for 2024, Eli Lilly remains a key player in the pharmaceutical industry.