Eli Lilly LLY posted better-than-expected third quarter earnings Thursday thanks to the ongoing surge in sales for its Mounjaro anti-obesity drug that offset a slump in revenues for its legacy diabetes treatment Trulicity.
Eli Lilly said adjusted profits for the three months ending in September were pegged at 10 cents per share, down from the $1.98 per share it earned of the same period last year but firmly ahead of the Street consensus forecast of loss of 13 cents per share.
Group revenues, Eli Lilly said, rose 36.8% from last year to $9.5 billion, well ahead of analysts' forecasts of an $8.954 billion tally.
Trulicity saw sales fell 10% from last year to $1.67 billion while Taltz, its severe plaque psoriasis drug, saw sales rise 9% to $744.2 million. Eli Lilly's new Mounjaro drug, which targets obesity and could challenge the early market dominance of Novo Nordisk's Ozempic, produced sales of $1.41 billion.
Novo Nordisk noted early last month that Ozempic, a similar treatment to Mounjaro, has also proven to be highly effective in treating kidney failure.
Looking into current financial year, Eli Lilly said non-GAAP earnings would likely slow to between to between $6.5 and $6.70 per share, down from its prior forecast of $9.70 to $9.90 per share, thanks in part to a surge in 'in-process research and development' costs.
The group held to its estimate of revenues in the region of $33.4 billion to $33.9 billion.
"Lilly had another strong quarter in Q3 as Mounjaro and Verzenio continued to gain momentum," said CEO David Ricks. "Lilly executed on business development priorities in the third quarter, including multiple acquisitions that expand our already robust pipeline."
"We remain focused on growth and delivering new, innovative medicines that make life better for millions of patients around the globe," he added.
Eli Lilly shares were marked 4.3% higher in late Thursday trading to change hands at $578.24 each, extending the stock's six-month gain to around 43%.
"Unfortunately, the majority of Lilly’s products failed to meet Street expectations as U.S. pricing, excluding favorable dynamics tied to Mounjaro, declined in the high-single digits," said Lee Brown, global sector lead for healthcare at global research firm Third Bridge.
“Despite the positive Q3 performance, management cut 2023 earnings guidance tied to acquired IPR&D charges incurred in the quarter," he added. "We note that the company left its 2023 guidance for revenues and gross margin of 80% unchanged, while increasing its expected tax rate from 14%-15% to 19%-20%.”
Last month, Eli Lilly agreed to pay $1.4 billion in cash for Indianapolis, Indiana-based Point Biopharma, a radiation-therapies focused drugmaker, that adds to Eli Lilly's growing oncology portfolio
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