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Demand for a new class of diabetes and obesity drugs is projected to boost US drugmaker Eli Lilly’s sales by at least 18 per cent in 2024, pushing its revenues to more than $40bn, the company said on Tuesday.
Lilly, the world’s biggest drugmaker by valuation, said fourth-quarter revenues from its new products category grew by $2.19bn to $2.49bn, driven by sales of diabetes drug Mounjaro and anti-obesity medication Zepbound.
Zepbound, Lilly’s injectable offering in the much-hyped weight-loss drug category, generated $175.8mn in worldwide sales in the fourth quarter, having been approved for use as an obesity treatment by the US Food and Drug Administration in November.
Lilly beat analysts’ expectations with revenues of $9.35bn in its fourth quarter. The company said it was now expecting annual revenue of between $40.4bn and $41.6bn, compared with $34.1bn the previous year and higher than analysts’ consensus of $39.3bn.
Shares in Eli Lilly and its European competitor Novo Nordisk have soared on the back of investor buzz around the new class of weight-loss drugs, GLP-1s, that are projected to generate $100bn in annual sales by the end of the decade, according to Goldman Sachs. Shares in the Indiana-based drugmaker were up 5.7 per cent in pre-market trading.
Lilly said it continued to build manufacturing capacity for Mounjaro and Zepbound but warned that “given strong demand and the time required to bring manufacturing capacity fully online” it expected that demand was “likely to outpace supply in 2024”.
David Ricks, Lilly’s chief executive, said the company’s performance in 2023 was a “tremendous achievement”.
“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,” he added.
Lilly plans to invest $2.5bn into a new injectables manufacturing site in Germany, on top of billions of dollars of investment into manufacturing sites in its home state of Indiana and in North Carolina. “Discussion of manufacturing and capacity expansion remains top-of-mind for investors,” said Evan Seigerman, an analyst at BMO Capital Markets, in a note.
Rival Novo Nordisk on Monday took ownership of three manufacturing plants in a bid to ease supply constraints for weight-loss drugs, as part of a three-way deal in which its main shareholder Novo Holdings bought one of the world’s biggest contract manufacturing firms Catalent for $16.5bn.
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