Eli Lilly (LLY) missed Wall Street consensus estimates on Mounjaro sales for the first quarter of the year, but its GLP-1 products, including Zepbound, still contributed to 26% sales growth year over year in the quarter.
The company also raised its full-year guidance by $2 billion to $43 billion on the upper end, giving a boost to the company’s stock — which was trading more than 6% higher at the start of Tuesday’s session.
Eli Lilly said it is also increasing access to the weight-loss drug Zepbound, reaching 67% of possible customers as of April 1. The company has met resistance as employers and insurers have refused to cover the drugs due to the spike in health expenses, but the tide appears to be turning. Lilly said it will continue to focus on getting more self-pay employers on board and increase access through pharmacy benefits managers’ formularies. This could also bode well for market leader and Lilly competitor Novo Nordisk (NVO), which reports its first quarter earnings on Thursday.
Mizuho’s healthcare sector expert, Jared Holz, wrote in a note to clients Tuesday that Zepbound’s status as a key driver in the company’s earnings after one full quarter is proof of the strong outlook despite manufacturing and coverage constraints.
“Investors may nitpick on total sales falling slightly short of analyst estimates for the first quarter but given the forecast boost just one quarter in, and very materially to that end, [Lilly] could hit new highs fairly soon and take out the skeptics in the process,” Holz said.
He added that, along with Novo, the company’s ongoing manufacturing buildout to meet the unprecedented demand is still farther ahead than other competitors, giving Lilly significant market share in a historic new sector.
“As far as market development and commercialization of these now household brand-name injections, [we] continue to stress we are in batting practice or shoot-around phase of a long game, and this will certainly be the largest therapeutic class patients/doctors/investors have ever seen,” Holz said.
The next milestones, which include finding new use cases for the drugs, creating a pill version, and undergoing clinical trials, will set the company up for such a market.
BMO Capital Markets managing director Evan Seigerman told Yahoo Finance that Lilly’s GLP-1 sales numbers are helping long-term expectations.
“I’m really encouraged by the earnings beat as well, suggesting that the profitability of these products is very high and likely to increase profits going forward,” Seigerman said.
When asked by investors if the company is preparing for production of an oral version to avoid the manufacturing hurdles faced by the injectables, CEO David Ricks said on an earnings call Tuesday that the pill would be easier to produce.
“Unlike injectables, where manufacturing needs to be built, we have partners for fill and finish and API [active pharmaceutical ingredient] production,” Ricks said.
Lilly reported total revenues of $8.8 billion in the quarter, up roughly $2 billion from revenues of nearly $7 billion in the same quarter in 2023.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on all social media platforms @AnjKhem.
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