Eli Lilly and Company LLY reported fourth-quarter 2023 adjusted earnings per share (“EPS”) of $2.49, which beat the Zacks Consensus Estimate of $2.46 per share. Earnings rose 19% year over year.
Revenues of $9.35 billion beat the Zacks Consensus Estimate of $8.86 billion. Sales rose 28% year over year, driven by exceptionally strong demand for Lilly’s FDA-approved tirzepatide medicines, diabetes drug Mounjaro and newly launched weight loss medicine, Zepbound.
Quarter in Detail
In the reported quarter, net realized prices rose 16%, while volumes rose 11%. The favorable impact of foreign exchange rates was 1% in the quarter.
Key growth products (select products launched prior to 2022 like Cyramza, Emgality, Jardiance, Olumiant, Retevmo, Taltz, Trulicity, Tyvyt and Verzenio) grew 9% to $5.27 billion. Eli Lilly’s new products (products launched since 2022 like Ebglyss, Jaypirca, Mounjaro, Omvoh and Zepbound) contributed $2.49 billion to revenues, led by Mounjaro and Zepbound.
While U.S. revenues rose 39% to $6.46 billion, ex-U.S. revenues increased 10% to $2.90 billion.
Among the newer drugs, the new diabetes drug Mounjaro recorded sales of $2.21 billion during the quarter, much higher than $1.41 billion in the previous quarter. The reported sales figure beat the Zacks Consensus Estimate of $1.79 billion, as well as our model estimate of $1.77 billion. Mounjaro was approved in May 2022 for treating type II diabetes.
Mounjaro sales benefited from increased demand and higher realized prices due to decreased utilization of savings card programs. Fourth-quarter revenues also benefited from a favorable one-time change in estimates for rebates and discounts. Excluding this one-time charge, sales rose 30% sequentially.
However, intermittent delays in fulfilling orders of certain Mounjaro doses, given significant demand, continued to hurt volumes in the fourth quarter.
Zepbound, which was approved in November 2023 and launched in December, recorded sales of $175.8 million in the fourth quarter. Both Mounjaro and Zepbound include the same compound tirzepatide, a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA). The GLP-1 segment is an important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity.
Among the growth products, Trulicity generated revenues worth $1.67 billion, down 14% year over due to lower volumes and pricing in the United States. Volumes were low in the United States as the company faced intermittent delays in fulfilling orders of Trulicity. Sales of Trulicity missed the Zacks Consensus Estimate of $1.72 billion as well as our model estimate of $1.76 billion.
Jardiance sales surged 30% to $798.1 million, driven by increased demand trends. Jardiance beat the Zacks Consensus Estimate of $756.0 million as well as our model estimate of $755.7 million.
Taltz brought in sales of $784.6 million, up 11% year over year, as the benefit from increased demand was partially offset by lower realized prices in the United States and outside. Taltz beat the Zacks Consensus Estimate of $779.0 million as well as our model estimate of $757.3 million.
Verzenio generated sales of $1.15 billion in the reported quarter, up 42% year over year, on increased demand, driven by the launch of the early breast cancer indication, steady performance in the metastatic indication and partly due to higher realized prices. Verzenio sales slightly missed the Zacks Consensus Estimate as well as our model estimate of $1.17 billion.
In the reported quarter, Lilly did not record any revenues from COVID-19 therapies compared to $38 million recorded in the year-ago quarter as the FDA rescinded the authorization granted to its COVID-19 antibody bebtelovimab last November.
2023 Results
Full-year 2023 sales rose 20% to $34.1 billion, beating the Zacks Consensus Estimate of $33.63 billion. Sales came in ahead of the guided range of $33.4 billion to $33.9 billion.
Adjusted earnings for 2023 were $6.32 per share, down 20% year over year. Earnings missed the Zacks Consensus Estimate of $6.34 per share. Earnings also fell short of the guided range of $6.50 to $6.70 per share.
2024 Guidance
In 2024, Lilly expects revenues in the range of $40.4 to $41.6 billion. The Zacks Consensus Estimate is pegged at $39.6 billion.
Management expects to record 2024 earnings per share in the range of $12.20 to $12.70. The Zacks Consensus Estimate is pegged at $12.50 per share.
Our Take
Lilly’s fourth-quarter results were better than expected as it beat estimates for earnings as well as sales. The company witnessed strong sales growth of Mounjaro, Verzenio, Jardiance and Taltz, which made up for the decline in the sales of key diabetes drug Trulicity in the quarter. The company issued upbeat guidance for 2024 despite the expectation of continued supply constraints for incretin-based products like Trulicity and Mounjaro this year. The company expects that demand for these products will outpace supply in 2024, even though it is investing in manufacturing capacity to increase the supply.
Shares rose 5.6% in pre-market trading in response to the strong earnings performance and an upbeat outlook for 2024.
Lilly’s stock has skyrocketed 107.9% in the past year, compared with an increase of 22.4% for the industry.
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Other than Mounjaro and Zepbound, Lilly has launched some other new products recently. Omvoh/mirikizumab was approved for its first inflammatory bowel disease (IBD) indication, ulcerative colitis, in the United States, Europe and Japan in 2023. Lilly expects to file a regulatory application seeking approval for Omvoh/mirikizumab for its second IBD indication, Crohn's disease, in 2024. Lilly’s BTK inhibitor Jaypirca was approved for mantle cell lymphoma in the United States in January 2023 and for the second indication, chronic lymphocytic leukemia, in December 2023.
Lilly will file the U.S. regulatory application for donanemab for early Alzheimer’s disease in the first quarter of 2024 while an application is under review in the EU. Donanemab is an important asset in Lilly’s pipeline.
Lilly expects all its new products to drive the top line in 2024. Trulicity sales are expected to continue to decline in 2024.
Zacks Rank & Stocks to Consider
Lilly currently has a Zacks Rank #3 (Hold).
Eli Lilly and Company Price and Consensus
Eli Lilly and Company Price and Consensus
Eli Lilly and Company price-consensus-chart | Eli Lilly and Company Quote
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In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share have improved from 64 cents to 69 cents. In the past year, shares of PBYI have risen 7.5%.
Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same once. PBYI delivered a four-quarter average earnings surprise of 76.55%.
In the past 60 days, estimates for Arcutis Biotherapeutics’ 2024 loss per share have narrowed from $2.66 to $2.65. In the past year, shares of ARQT have declined 63.7%.
Arcutis Biotherapeutics beat estimates in three of the last four quarters and missed the same on the remaining occasion. ARQT delivered a four-quarter earnings surprise of 9.23%, on average.
Estimates for Novo Nordisk’s 2024 earnings per share have increased from $3.20 to $3.30 over the past 60 days. NVO’s stock has surged 65.1% in the past year.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, missed in one and matched estimates in one, delivering an earnings surprise of 1.85% on average.
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