Eli Lilly (LLY) shares were down slightly Tuesday despite reporting better-than-expected earnings on both the top and bottom lines for the final quarter of 2023, driven by an expected boost from GLP-1 products Mounjaro and Zepbound.
The company is trading at $705 per share, after popping in pre-market trading on the solid results and dropping to under $700 per share during the day. But the stock is still trading at an all-time high, up more than 107% in the past year.
The diabetes and weight loss drugs, Mounjaro and Zepbound, respectively, contributed nearly $2.4 billion for the quarter, and Lilly ended the year with a total of $5.2 billion globally in revenues from both drugs in 2023. That’s more than 50% of Lilly’s reported $9.35 billion in revenues for the year.
“2023 was a year of tremendous achievement for Lilly, which delivered life-changing medicines to more patients than ever before resulting in strong revenue growth,” said David Ricks, Lilly’s chair and CEO, in a statement.
“Lilly invested in the quality, reliability and resilience of our supply chain with new advanced manufacturing plants and lines in the US and in Europe. Entering 2024, we remain focused on the opportunity in front of us,” Ricks said.
Like its competitor, Novo Nordisk (NVO), Eli Lilly is expecting this year to be one of continued struggle to meet demand. This, despite doubling manufacturing capacity by the end of 2023, according to chief financial officer Anat Ashkenazi.
“But that is insufficient to meet the market demand, we’re already seeing that. I expect that through 2024, demand will likely outpace supply,” Ashkenazi told Yahoo Finance in an interview Tuesday.
Lilly has committed $3 billion to expand manufacturing, including new sites in the US and Germany. A North Carolina plant is expected to open up by the end of this year.
The two drugs now have 90% commercial insurance and Medicare Part D coverage, after a year of reports that companies, insurers, and governments were balking over the price of GLP-1s.
Ashkenazi said that 50% of employers have opted in to cover the class of drugs this year.
The buzz over the newest GLP-1s, named for the hormone they mimic in the body that helps slow digestion and increase insulin production, has put pressure on Lilly’s other drugs. Sales of its older GLP-1, Trulicity, declined 4%, or about $100 million less than the third quarter of 2023.
Beyond GLP-1
Lilly is waiting for results on additional benefits of the GLP-1s, which could open the door for additional disease areas to add to its portfolio. The company is currently studying the drugs’ impact on liver disease. Other companies are also studying effects on heart disease, sleep apnea, and addiction.
Unlike its competitor, Novo, Eli Lilly has a broader portfolio to boost its revenues and its pipeline. The pharmaceutical giant boasts a market cap of more than $660 billion and has a portfolio spanning insulin, weight loss, and Alzheimer’s. The company is awaiting FDA approval of its new Alzheimer’s treatment, donanemab, which could add to the company’s top line for 2024.
Despite the company’s stock trading down, analysts remain bullish on the company and its 2024 outlook.
“And while shares trade at a significant premium to peers, we see unprecedented growth for LLY over the next decade with the company’s incretin franchise reaching $50bn+ by 2030 and continuing to grow from there,” JPMorgan analysts said in a note.
Eli Lilly anticipates revenues to be between $40 and $41 billion for full-year 2024, about $1 billion higher than Wall Street’s estimates.
Mizuho’s healthcare specialist Jared Holz noted that some analysts were “a bit skeptical of consensus forecasts for FY24 being too aggressive though this new LLY annual guidance of $12.45 at the mid-point is ahead of the mean projections that were around $12.40 coming in to today.”
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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