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Eli Lilly’s Q2 Earnings Surpass Expectations, Raises Full-Year Outlook

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Eli Lilly reported stellar second-quarter earnings, significantly exceeding market expectations, driven by robust sales of its diabetes drug Mounjaro and weight loss injection Zepbound. The pharmaceutical giant raised its full-year revenue forecast by $3 billion, now expecting between $45.4 billion and $46.6 billion, while also increasing its adjusted earnings guidance to a range of $16.10 to $16.60 per share.

The company’s performance was primarily bolstered by the increased demand for Mounjaro and Zepbound, which together have seen sales soar as supply constraints begin to ease. Despite previous shortages, Eli Lilly’s recent expansion in production capacity has improved the availability of these drugs in the U.S., contributing to the positive financial results. Zepbound, in its second full quarter on the U.S. market, generated $1.24 billion in sales, outperforming analyst expectations. Similarly, Mounjaro brought in $3.09 billion, more than triple the revenue from the same period last year.

CEO David Ricks noted that the company has ramped up its manufacturing efforts, including building six new plants and hiring thousands of workers to meet the growing demand. He also mentioned that Eli Lilly is working on developing more convenient weight loss pills to complement its existing injectable treatments.

Eli Lilly’s shares rose by more than 7% following the earnings announcement, continuing a strong upward trend that has seen the stock gain over 30% this year. The company’s market cap now exceeds $730 billion, making it the largest pharmaceutical firm based in the U.S. This success contrasts with competitor Novo Nordisk, which recently reported weaker-than-expected sales for its similar drugs due to pricing pressures.

 

Bristol Myers Squibb Beats Earnings Estimates and Raises Outlook Amid Cost-Cutting Measures

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Bristol Myers Squibb reported strong second-quarter earnings, surpassing Wall Street expectations and raising its full-year guidance as part of its broader strategy to cut costs and reinvest in key drug brands and R&D programs. The pharmaceutical giant has outlined plans to reduce $1.5 billion in expenses by 2025, which includes laying off over 2,000 employees and consolidating its sites.

Key Financial Highlights:

  • Earnings per share: Adjusted EPS of $2.07, compared to an expected loss of $1.63.
  • Revenue: $12.2 billion, up 9% year-over-year, versus the expected $11.55 billion.
  • Net income: $1.68 billion, or 83 cents per share, down from $2.07 billion, or 99 cents per share, in the prior year.

Guidance Update:

  • Full-year revenue forecast: Now projected to increase at the “upper end” of the low single-digit range, up from a low single-digit increase.
  • Full-year adjusted earnings guidance: Raised to 60-90 cents per share, up from the previous forecast of 40-70 cents per share.

Shares of Bristol Myers rose nearly 8% following the earnings report.

Performance Drivers:

  • Eliquis: The blockbuster blood thinner recorded $3.42 billion in sales, a 7% increase year-over-year, aligning with analyst expectations. Eliquis, which Bristol Myers co-owns with Pfizer, is anticipated to lose market exclusivity by 2028.
  • Revlimid: Despite facing competition from generics, the blood cancer drug brought in $1.35 billion in sales, surpassing the estimated $1.09 billion.
  • Opdivo: The cancer drug generated $2.39 billion in sales, exceeding the expected $2.29 billion.

Growth Portfolio:

  • Reblozyl: Sales were above analysts’ expectations, contributing significantly to the company’s growth.
  • Opdualag and Camzyos: Both drugs, along with Opdivo, drove revenue growth within the portfolio.
  • Abecma: The cell therapy for multiple myeloma recorded $95 million in sales, close to the expected $95.8 million.

Bristol Myers continues to face pressure to innovate and introduce new drugs to compensate for revenue losses from key treatments like Revlimid, Eliquis, and Opdivo, which will eventually lose their market exclusivity.

The company’s proactive measures to cut costs and reinvest in strategic areas underscore its commitment to sustaining growth and competitiveness in the pharmaceutical industry.

Novo Nordisk Shares Dip Amid Earnings Miss and Reduced Profit Outlook

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Novo Nordisk experienced a dip in its share price after posting weaker-than-expected net profit for the second quarter and revising its operating profit outlook downwards. The pharmaceutical giant reported a net profit of 20.05 billion Danish kroner ($2.93 billion) for the quarter ending in June, falling short of the 20.9 billion Danish kroner projected by LSEG analysts. Additionally, the company’s EBIT (earnings before interest and tax) was 25.93 billion Danish kroner, below the forecasted 26.86 billion Danish kroner.

In response to these results, Novo Nordisk adjusted its full-year 2024 operating profit growth expectations to a range of 20% to 28%, down from the previous 22% to 30%. This announcement caused the company’s shares to tumble nearly 7% before recovering slightly, trading down 2.71% by 9:40 a.m. London time.

Despite the disappointing second-quarter earnings, Novo Nordisk raised its sales growth guidance for the full year, expecting growth between 22% and 28% at constant exchange rates, up from the previous estimate of 19% to 27%. This optimism is partly driven by a 55% increase in sales of its popular weight loss drug, Wegovy, which reached 11.66 billion kroner in the second quarter compared to the same period in 2023.

CEO Lars Fruergaard Jørgensen expressed confidence in the company’s future growth, highlighting the potential for “attractive growth” in the coming months. He assured investors of the company’s ability to scale operations and supply patients, emphasizing that adjustments to rebates were a factor in the second-quarter results. Jørgensen remains positive about the long-term competitiveness of Novo Nordisk, even in the face of increasing competition from companies like Roche, which recently reported promising early-stage trial data for its obesity drug candidate.

Moreover, Novo Nordisk’s Wegovy has recently achieved significant milestones. The drug was approved for sale in China, the world’s second-largest economy, and received backing from medical regulators in the U.K. and European Union for reducing risks of serious heart events among overweight and obese adults.