Pre-market surges by 10%! Eli Lilly's second-quarter revenue and profit both greatly exceed expectations, raising full-year performance guidance | Financial Report Insights

Thanks to the strong sales of weight-loss drugs, pharmaceutical giant Eli Lilly's second-quarter revenue increased by 36% year-on-year, and net profit surged by 68%, both exceeding market expectations. The company predicts that the demand for weight-loss drugs will continue to rise throughout the year, and has raised its full-year revenue and profit guidance.

Eli Lilly announced its second-quarter financial report for 2024 on Thursday, with the following results:

1) Key Financial Data

Revenue: Second-quarter revenue increased by 36% year-on-year to $11.3 billion, significantly exceeding the market estimate of $9.98 billion. Excluding the $579 million revenue from the sale of Baqsimi (glucagon nasal powder) rights in the second quarter of 2023, the year-on-year growth rate was 46%.

Profit: Second-quarter net profit increased by 68% year-on-year to $2.97 billion, with adjusted earnings per share of $3.92 (Non-GAAP), an 86% increase from $2.11 in the same period last year, surpassing the expected $2.6.

The gross profit margin was 80.8%, an increase of 2.5 percentage points from the same period last year.

2) Performance Guidance

Revenue: Eli Lilly expects full-year revenue of $45.4 billion to $46.6 billion, up from the previous estimate of $42.4 billion to $43.6 billion.

Profit: The company forecasts adjusted earnings per share of $16.1 to $16.6 for the full year, compared to the previous estimate of $13.7.

Following the release of the financial report, Eli Lilly's stock surged more than 10% in pre-market trading.

Weight-loss Drugs Drive Revenue Growth

The significant increase in revenue for Eli Lilly in the second quarter was mainly driven by weight-loss drugs, including:

• Zepbound generated $1.24 billion in revenue in the second quarter, exceeding the market estimate of $818.9 million.
• Mounjaro achieved revenue of $3.09 billion, compared to $980 million in the same period last year.

In addition, the breast cancer treatment drug Verzenio under Eli Lilly saw a 44% year-on-year revenue growth to $1.33 billion in the second quarter.

Overall, Eli Lilly's drug sales volume in the second quarter increased by 27% year-on-year, with a 10% increase in average selling price, mainly driven by Mounjaro.

Chairman and CEO David A. Ricks stated in the financial report:

Due to our expansion plan, Mounjaro, Zepbound, and Verzenio led the company's strong financial performance in the second quarter. Equally exciting is that we have seen growth globally in the company's drugs for cancer, neurological diseases, and autoimmune diseases.

Eli Lilly pointed out that sales of the company's weight loss drugs (GLP-1 receptor agonists) have increased, mainly due to capacity expansion and optimization of the U.S. market channels. Although supply and demand are stabilizing, rising demand may lead to some product supply shortages. To meet market demand, Eli Lilly plans to launch new 2.5 mg and 5 mg doses of Zepbound single-dose vials in the U.S. market in the coming weeks.

Eli Lilly also stated that the company's Alzheimer's drug Kisunla has been approved in the U.S., and Jaypirca has been approved in Japan for the treatment of relapsed or refractory mantle cell lymphoma, among others.

The company has committed an additional investment of $5.3 billion for a new facility in Indiana to enhance the production of the diabetes drug tirzepatide and active pharmaceutical ingredients (API) for pipeline drugs