Eli Lilly lifts guidance after sales of Mounjaro and Zepbound drugs soar

Soaring sales of Eli Lilly’s hugely popular diabetes and weight loss drugs Mounjaro and Zepbound prompted the US pharmaceutical group to lift its guidance for the year and pushed its share price towards record high territory.

The Indianapolis-based drugmaker now expects full-year revenue in a range of $42.4bn to 43.6bn — an increase of $2bn at both ends compared with its previous forecast — following a 26 per cent leap in first-quarter revenues and as extra production capacity for the weight loss drugs becomes available later this year.

Investor hype over this new class of drugs — known as GLP-1s — which analysts project could generate more than $100bn in annual sales by the end of the decade, has propelled Eli Lilly’s market capitalisation above $700bn, making it the world’s biggest pharmaceutical group by market value.

Eli Lilly shares closed 6 per cent higher on Tuesday, taking its year-to-date gain to 34 per cent. Shares of Denmark’s Novo Nordisk, which makes rival Ozempic and Wegovy medicines, are up more than 29 per cent in 2024.

For its fiscal first quarter, Eli Lilly’s earnings per share came in at $2.58, above analysts’ expectations of $2.47. But first-quarter revenues of $8.77bn fell slightly below expectations because of a lack of production capacity to meet the huge demand for GLP-1s.

Eli Lilly’s chief executive David Ricks attributed the drugmaker’s performance to “strong sales of Mounjaro and Zepbound”, and said the company was “rapidly expanding manufacturing capacity to make our incretin medicines available to more patients”.

Eli Lilly last week announced a deal to buy a Wisconsin-based production facility for filling its injectable pens from Nexus Pharmaceuticals. The drugmaker has also now broken ground on a new site in Germany. The Financial Times also previously reported that Eli Lilly had tapped contract manufacturers BSP Pharmaceuticals and Resilience to fill and finish its pens.

Almost all dose varieties of Mounjaro, which treats type 2 diabetes, and Zepbound, which has been approved for weight loss, are in short supply until the end of the second quarter of this year, according to a US Food and Drug Administration database tracking shortages.

Eli Lilly said it “continues to expand manufacturing capacity, with the most significant production increases in 2024 expected in the second half of the year”.

Sales in Eli Lilly’s new products category rose by $1.79bn year on year to $2.39bn in the first quarter, driven by Mounjaro and Zepbound. Sales of the latter totalled $517.4mn in the first quarter, 33 per ahead of analyst expectations, though Mounjaro sales of $1.8bn lagged behind expectations.

Evan Seigerman, an analyst at BMO Capital Markets, said in a note that “the majority of this miss was due to a lack of supply, with Lilly likely shifting capacity to Zepbound during . . . Q1”.