Lilly expects strong profits in 2024 as demand for weight-loss drugs increases

Eli Lilly on Tuesday forecast 2024 profits above Wall Street estimates as demand for its recently approved weight-loss drug surged, and said the treatment helped reduce symptoms of a common fatty liver disease, difficult to be treated in an intermediate study.

Sales of obesity drug Zepbound reached $175.8 million in the first few weeks after its launch in early December, after being approved by the US Food and Drug Administration (FDA) in November.

Shares of the Indianapolis-based drugmaker rose nearly 5% in premarket trading after rising about 11% in January, making Lilly the eighth-largest U.S. company by market capitalization and the largest healthcare company .

“I think I was very surprised by Zepbound’s sales. I wasn’t expecting anything like this,” said Troy Harmon, chief investment officer at Henssler Financial.

Lilly has said it will expand its manufacturing, but given the time needed to bring the new capacity fully online, the company expects demand for its diabetes and obesity drugs Mounjaro and Zepbound to outstrip supply by 2024.

Lilly and its main rival in the obesity market, Novo Nordisk, are testing their treatments for other health benefits, such as obstructive sleep apnea and chronic kidney disease, to ensure broader coverage for the drugs.

Explosive demand for Mounjaro, also used as an over-the-counter weight loss drug, and now Zepbound, has led to a wave of buying of Lilly shares, boosting the drugmaker’s market value to more than $600 billion.

The drug company reported that tirzepatide, the active ingredient in Zepbound and Mounjaro, also met the main objective of a study of a type of fatty liver disease now called steatohepatitis associated with metabolic dysfunction, or Mash for short.

Lilly said the drug helped up to 74% of patients become disease-free without worsening liver recovery at 52 weeks, compared with 13% of patients who received a placebo. The company did not provide further details, but a clinical trial database reported that patients in the study had stage 2 or 3 fibrosis.

The company has invested in manufacturing facilities in the United States and Europe to increase supplies of tirzepatide, announcing in November that it would build its first plant in Germany for $2.47 billion.

Lilly said it expects 2024 adjusted earnings of between $12.20 and $12.70 per share. That puts the midpoint slightly above analysts’ estimates of $12.43 per share, according to LSEG data.

Lilly reported that Mounjaro sales for the quarter increased to $2.21 billion from $279.2 million last year, easily topping expectations of $1.8 billion, according to BMO Capital Markets.

Fourth-quarter earnings of $2.49 per share on an adjusted basis beat Wall Street expectations by 27 cents.

Source: Terra

Rose

Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.