Lilly’s Q1 2024 Financial Report: Full-Year Revenue Outlook Raised by $2 Billion, with a 67% Net Income Increase

Eli Lilly’s net income soared to $2.24 billion in Q1 2024, marking a substantial 67% increase from the previous year. Earnings per share (EPS) followed suit, rising by 66% to $2.48 compared to Q1 2023. On a non-GAAP (generally accepted accounting principles) basis, net income and EPS reached $2.34 billion and $2.58 respectively, showing a significant uptick from the same period last year.

Quarterly Performance Overview: Lilly’s $8.77B Surge, Shares Up 5.4%

The company reported worldwide revenue of $8.77 billion, up by 26%, attributed to a 16% increase in volume and a 10% rise in realized prices. Strong demand for products like Mounjaro, Zepbound, Verzenio, and Jardiance drove the volume surge, although declines in Trulicity partially offset this growth. Key growth products, such as Cyramza, Emgality, Jardiance, Olumiant, Retevmo, Taltz, Trulicity, Tyvyt, and Verzenio, grew by 2% to reach $4.66 billion, while new products launched since 2022, including Ebglyss, Jaypirca, Mounjaro, Omvoh, and Zepbound, contributed $2.39 billion to revenues, with Mounjaro and Zepbound leading the way.

The overall market response was positive; Lilly’s shares rose by 5.4% in pre-market trading following the increased outlook for 2024. Over the past year, Lilly’s stock has surged by 81.7%, outperforming the industry.

Growth Spurts: U.S. Market Spikes 28%, Overseas Revenue Soars by 22%

In the U.S., revenue surged by 28% to $5.69 billion, propelled by a 16% uptick in realized prices and a 12% increase in volume. Mounjaro drove the higher realized prices, while Zepbound, Mounjaro, and Verzenio fueled the rise in volume, albeit partially offset by a decline in Trulicity sales. 

Mounjaro recorded sales of $1.81 billion, although slightly lower than the previous quarter. Zepbound, launched in December 2023, generated sales of $517.4 million in the quarter, experiencing supply constraints due to overwhelming demand. Here it was the exceptionally high demand for Lilly’s incretin medicines that resulted in wholesaler backorders by the quarter’s end. Lilly anticipates ongoing tight supply as production struggles to keep up with demand. In the short to mid-term, the company expects sales growth for incretin medicines to hinge largely on production capacity. Further, Eli Lilly’s tirzepatide medicines face competition from Novo Nordisk‘s semaglutide, impacting sales performance.

Outside the U.S., revenue grew by 22% to $3.07 billion, propelled by a 23% increase in volume, somewhat offset by a 1% dip in realized prices. The surge in volume was primarily fueled by Mounjaro, Verzenio, Jardiance, and Tyvyt.

Reflecting these positive changes, Eli Lilly revised its 2024 sales guidance for 2024 by $2 billion, now forecasting a range of $42.4 billion to $43.6 billion, with an adjusted EPS guidance of between $13.05 and $13.55 on a reported basis and $13.50 to $14.00 on a non-GAAP basis.

Lilly’s Promising Pipeline and Future Outlook

While first-quarter results slightly missed sales estimates, demand for key products remained robust. Supply constraints for certain medications like Trulicity, Mounjaro, and Zepbound dampened sales, despite exceeding demand. Lilly is investing in manufacturing capacity expansion to meet growing demand, expecting production to increase in the second half of 2024. Ultimately optimism around production expansion and strong demand is what prompted the upward revision of sales and earnings guidance for 2024.

Lilly looks forward to substantial revenue boosts from recently approved drugs such as Omvoh and Jaypirca in 2024. Furthermore, ongoing label expansion studies aim to broaden the patient base eligible for these medications. Looking ahead, Lilly’s pipeline includes donanemab for early Alzheimer’s disease, currently under review in the U.S. and Europe. Despite a recent delay in FDA approval, the company maintains optimism regarding its potential.

Chairman and CEO David Ricks emphasized the company’s solid performance in Q1, driven by strong sales of Mounjaro and Zepbound. Further, he noted the increased demand for their medicines, attributing it to their progress in addressing significant healthcare challenges and pipeline investments for future growth.

“Our progress in addressing some of the world’s most significant health care challenges has resulted in increased demand for our medicines. As we continue to make pipeline investments that position us for future growth, we are rapidly expanding manufacturing capacity to make our incretin medicines available to more patients.”

Author

Bernice Lottering