Source: Wall Street News
Sales of Zepbound, a blockbuster GLP-1 product produced by Lilly, one of the leading weight loss medicine companies, exceeded expectations in the first quarter. At the same time, the company raised its annual revenue guidance by 2 billion US dollars.
Before the US stock market on Tuesday, April 30, a manufacturer of Zepbound, one of the two magic drugs for weight loss$Eli Lilly and Co (LLY.US)$The first quarter results were announced. Financial reports show that the company's revenue for the last quarter was US$8.768 billion, up 26% year on year, lower than analysts' expectations of US$8.92 billion; adjusted net profit was US$2,335 million, up 60% year on year.
Eli Lilly also announced additional annual revenue guidelines. Currently, annual revenue is estimated to be US$42.4 to US$43.6 billion; previously, the forecast was US$404 to 41.6 billion US dollars.
After the opening of the US stock market, Eli Lilly's stock price soared, rising nearly 7% at one point. Currently, Eli Lilly's market capitalization exceeds 700 billion US dollars, higher than Tesla and Walmart among the S&P constituents, and is the pharmaceutical company with the highest market capitalization in the world.
Zepbound, the magic drug for weight loss, generated $517 million in revenue in the first quarter
Specifically, Eli Lilly's net profit for the first quarter increased 67% year over year to US$2,243 million, with earnings per share of US$2.48. Non-GAAP net profit excluding one-time items was US$2,335 million, up 60% year over year. Adjusted earnings per share were US$2.58, exceeding analysts' expectations of US$2.45.
Thanks to higher sales prices, product portfolio optimization, and improved production costs, Eli Lilly's gross margin increased to 80.9% from 76.6% in the same period last year.
By product, Mounjaro's global sales in the first quarter reached 1.806 billion US dollars, more than three times that of the same period last year, mainly benefiting from higher prices and increased demand in the US market. Zepbound was approved for listing in the US in November last year. The first full quarter contributed $517 million in sales, exceeding analysts' expectations of $418 million. In the US, Zepbound is still in short supply, and the shortage is expected to continue until June.
Breast cancer drug Verzenio sales increased 40% year over year to $1.05 billion. However, Lilly's flagship product, the GLP-1 hypoglycemic drug Trulicity, was clearly impacted by Mounjaro, and sales fell 26% year over year to US$1,456 million.
Regarding this quarter's results, David Ricks, the company's chairman and CEO, commented:
Eli Lilly's first quarter results reflect strong year-over-year revenue growth, particularly strong sales for Mounjaro and Zepbound. As we continue to invest in new product pipelines for future growth, we are rapidly expanding our production capacity to meet growing market demand.
The new pipeline is being developed smoothly, and the company is continuing to expand the production scale of diet pills
GLP-1 drugs can simulate hormones produced in the intestines to suppress appetite and regulate blood sugar, and are popular among weight loss people around the world.
According to Eli Lilly, part of the reason for the increase in guidance is that the production expansion path for Zepbound, Mounjaro and similar drugs in the second half of this year was “clearer.”
Since Zepbound has been in short supply almost since its launch, current sales are only the upper limit of production capacity, not the increase in sales volume. Analysts say Zepbound is expected to generate more than $1 billion in sales in its first year of launch, making it likely the highest-grossing drug ever.
Eli Lilly said it is continuing to expand the scale of production, and production is expected to increase the most in the second half of the year. In an interview with the media, Eli Lilly Chairman and CEO Ricks said that it is difficult to expand the production capacity of GLP-1 diet pills because “Mounjaro and Zepbound are the most complex drugs Eli has ever produced”:
Our priority is to make more products, and we're doing our best to do that. However, this is a capital-intensive project, technically complex, and highly regulated.
Eli Lilly has invested 2.5 billion US dollars to build a new diet medicine production base in Frankfurt, Germany to expand production capacity. The factory will start construction in the summer and be put into operation in 2027. The move is aimed at addressing the shortage of Zepbound, a popular diet drug in the US market, and improving its competitiveness in competing with Novo Nordisk for share in the injectable diet medicine market on a global scale.
In terms of the new product pipeline, the company also received a number of positive news, including positive results in the phase III clinical trial of Tirzepatide (Zepbound, Mounjaro's main active ingredient) to treat obstructive sleep apnea, and the application for marketing of the new drug mirikizumab for Crohn's disease in the US and Europe. The company's new drug for Alzheimer's disease, donanemab, is also expected to be approved for marketing this year.
New drugs under development are expected to inject new growth impetus into the company. In addition to treating obstructive sleep apnoea, Eli Lilly is also conducting clinical trials on Tirzepatide in various fields of indication, such as non-alcoholic steatohepatitis and heart failure.
edit/lambor