Eli Lilly & Co. shares
LLY,
gained 1% premarket on Thursday after the drugmaker reported a surprise third-quarter profit and strong sales growth, boosted by diabetes drug Mounjaro, but slashed its full-year outlook as it digests a string of recent acquisitions.
The company swung to a net loss of $57.4 million, or 6 cents a share, from net income of $1.45 billion, or $1.61 a share, in the year-ago period, with results weighed down by acquired in-process research and development charges. Excluding nonrecurring items, adjusted earnings per share of 10 cents beat the FactSet consensus of a per-share loss of 18 cents. Revenue jumped 37% to $9.50 billion, above the FactSet consensus of $8.967 billion, as volume increased 31% and prices were up 6%.
Sales growth was fueled largely by Lilly’s diabetes drug Mounjaro, breast cancer treatment Verzenio and heart-failure drug Jardiance. Mounjaro sales weighed in at $1.409 billion, versus $187 million in the year-earlier period and well ahead of the FactSet consensus of $1.279 billion. Revenues also got a $1.42 billion boost from the sale of rights for the olanzapine portfolio, which includes the antipsychotic medication Zyprexa.
Revenues from diabetes drug Trulicity came in at $1.674 billion, down 10% from a year earlier and falling short of the FactSet consensus of $.1899 billion.
For 2023, the company cut its adjusted EPS guidance range to $6.50 to $6.70 from $9.70 to $9.90, as acquired IPR&D guidance jumped to $3.18 billion, an increase of $2.98 billion, related to acquisitions. Lilly has been on a buying spree this year, with recently completed acquisitions including DICE Therapeutics, Versanis Bio, and Sigilon Therapeutics. The company left its full-year revenue guidance unchanged, at $33.4 billion to $33.9 billion.
The hefty one-time items related to business development “are a distraction from an otherwise impressive quarter,” BMO Capital Markets analyst Evan David Seigerman wrote in a note Thursday. Based on this quarter’s strong revenues, Seigerman wrote, the company’s full-year guidance “appears conservative, a continuation of Lilly’s under promise, over deliver strategy, in our view.”
Third-quarter U.S. Mounjaro sales reflected higher realized prices amid lower use of savings card programs as access continues to expand, Lilly said, although “intermittent delays fulfilling orders” of certain doses amid the significant demand affected volume.
Analysts are watching for the potential fourth-quarter regulatory approval of tirzepatide — currently marketed as Mounjaro in diabetes — for the treatment of obesity. Lilly on Thursday said a U.S. Food and Drug Administration decision on its experimental Alzheimer’s treatment donanemab is now expected in the first quarter of next year, whereas the company had previously said the decision could come before the end of this year. An FDA nod would open the door for the therapy to compete with Biogen Inc.
BIIB,
and Eisai Co. Ltd.’s
ESALF,
Leqembi.
Lilly shares have rallied 52% in the year to date, while the S&P 500
SPX,
has gained 10.4%.
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