Eli Lilly raises FY forecast as diabetes drug Mounjaro excels

Shares of Eli Lilly (NYSE:) are up over 3% in premarket Thursday after the drug maker reported solid Q1 results and raised its full-year forecast.

The company EPS of $1.62 on revenue of $6.96 billion, which compares to the analyst consensus for earnings of $1.69 on revenue of $6.84B. Overall, revenue fell 11% year-over-year as Lilly failed to generate any revenue from its COVID-19 antibodies product, compared to $1.47B generated for Q1 2022.

However, the closely-watched diabetes drug Mounjaro generated $568.5 million in revenue, easily ahead of the consensus estimate of $403.8M. Mounjaro launched in the U.S. for the treatment of type 2 diabetes in June 2022.

“Core business growth drove solid first-quarter financial results and a strong start for Lilly in 2023, which includes pipeline progress led by positive SURMOUNT-2 data for tirzepatide in obesity,” said David A. Ricks, Lilly’s chair and CEO.

As a result, Lilly raised its profit forecast to a midpoint of $8.75, easily ahead of the consensus at $8.45. The company previously expected to report a full-year profit of $8.45.

The revenue forecast is also boosted so Lilly now expects FY sales of $31.2B to $31.7B from the prior $30.3B-$30.8B.

Eli Lilly also published the latest data on Mounjaro, which is described by BMO analysts as “the best injectable option for weight loss.”

“With these data in hand, Lilly can finish the rolling submission for the obesity, with a potential approval by YE23. Once approved, we expect rapid uptake, given Lilly’s investment in manufacturing, driving the P&L and supporting our Outperform thesis. Reiterate Top Pick, given a $50B+ sales potential across indications,” the analysts said in a note.

Cantor Fitzgerald analysts said the results were mixed, although they reiterated an Overweight rating.

“We continue to believe that LLY’s earnings outlook is favorable when compared with those of its peers. Its margin profile represents one of the strongest expansion stories in Pharma, in our opinion, with the potential for mid-teens EPS growth. We also believe LLY is entering a period of earnings estimate growth through 2030, bolstered by multiple product pipeline readouts, as well as launches of its first-in-class/best-in-class compounds,” they said.