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Can Mounjaro & Zepbound Drive Eli Lilly (LLY) Q2 Earnings?
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Eli Lilly’s (LLY - Free Report) top-line growth in the second quarter is expected to have been driven by strong demand for its FDA-approved tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound. Tirzepatide is a dual GIP and GLP-1 receptor agonist. The GLP-1 segment is an important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity. GLP-1 drugs work by mimicking the hormone GLP-1, resulting in weight loss, lowering hemoglobin A1c and reducing cardiovascular risks.
Mounjaro was launched in mid-2022, while Zepbound was launched in November 2023. Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Lilly on exceptional demand growth. In the second quarter, in addition to rising demand, higher realized prices due to decreased utilization of savings card programs are expected to have benefited Mounjaro sales.
From the second half of 2024, Lilly expects typical pricing headwinds for Mounjaro like for all diabetes medicines as savings card dynamics should cease to have a notable effect on realized price comparisons to base periods.
However, continued supply constraints for incretin-based products like Mounjaro and Zepbound have been hurting sales as demand exceeds supply. These delays are expected to have continued to hurt volumes in the second quarter. Lilly is investing in new advanced manufacturing plants and lines in the United States and Europe to increase the supply of Zepbound and Mounjaro to meet rising demand. However, it will take time to bring the increased capacity fully online. Lilly expects production of incretin-based products to increase from the second half of 2024.
The Zacks Consensus Estimate for Mounjaro sales is $2.34 billion, while our model estimate is $2.46 billion. Our model estimate for Zepbound is $700 million.
Year to date, Lilly’s stock has risen 35.3% compared with an increase of 18.8% for the industry.
Image Source: Zacks Investment Research
Tirzepatide faces strong competition from Novo Nordisk’s (NVO - Free Report) drug semaglutide. Semaglutide is approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. Despite supply challenges, Wegovy is seeing strong prescription trends and is generating impressive revenues and profits for Novo Nordisk.
Other than Mounjaro and Zepbound, higher demand and volume growth for Lilly’s key growth drugs like Verzenio, Jardiance, Emgality, Taltz and others are likely to have provided top-line support. While volumes are expected to have increased for most drugs, lower realized prices are likely to continued hurting sales of most drugs like Trulicity.
Trulicity sales are likely to have been hurt by lower volumes and increased competition. Intermittent delays in fulfilling orders are likely to have hurt Trulicity volumes in the United States. In international markets, Trulicity volumes are being affected by the company’s measures to manage strong demand amid tight supply. Doctors have been asked not to start new patients on Trulicity in order to minimize disruption to existing patients.
The Zacks Consensus Estimate for Trulicity, Taltz, Verzenio, Jardiance, Olumiant and Emgality is $1.25 billion, $758.0 million, $1.24 billion, $792 million, $238 million and $157 million, respectively.
Our estimates for Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality are $1.29 billion, $764 million, $1.28 billion, $818.8 million, $234.0 million and $157.9 million, respectively.
Newer products (products launched from 2022 onwards) like Ebglyss, Jaypirca and Omvoh are likely to have contributed to sales growth.
Last month, Lilly won a long-awaited FDA approval for donanemab, to be sold under the brand name Kisunla, for treating early symptomatic Alzheimer's disease. Lilly is expected to discuss the commercialization plans for Kisunla on the second-quarter conference call.
The Zacks Consensus Estimate for Lilly’s total sales and earnings is pegged at $9.83 billion and $2.64 per share, respectively.
Key Recent Events
On Jul 8, Lilly announced a definitive agreement to acquire Waltham, MA-based small biotech Morphic Therapeutics (MORF - Free Report) for approximately $3.2 billion. The acquisition will expand Lilly’s pipeline in immunology, a core area for the company, by adding Morphic’s oral integrin therapies for treating serious chronic diseases.
Morphic's lead pipeline candidate is MORF-057, an oral α4β7 inhibitor with the potential to improve outcomes in treating inflammatory bowel disease (IBD), which includes two conditions — Crohn's disease (“CD") and ulcerative colitis (“UC”). MORF-057 is being evaluated in two phase II studies in UC and one phase II study in CD. The transaction has been approved by the boards of directors of both companies and is expected to close in the third quarter of 2024.
Image: Bigstock
Can Mounjaro & Zepbound Drive Eli Lilly (LLY) Q2 Earnings?
Eli Lilly’s (LLY - Free Report) top-line growth in the second quarter is expected to have been driven by strong demand for its FDA-approved tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound. Tirzepatide is a dual GIP and GLP-1 receptor agonist. The GLP-1 segment is an important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity. GLP-1 drugs work by mimicking the hormone GLP-1, resulting in weight loss, lowering hemoglobin A1c and reducing cardiovascular risks.
Mounjaro was launched in mid-2022, while Zepbound was launched in November 2023. Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Lilly on exceptional demand growth. In the second quarter, in addition to rising demand, higher realized prices due to decreased utilization of savings card programs are expected to have benefited Mounjaro sales.
From the second half of 2024, Lilly expects typical pricing headwinds for Mounjaro like for all diabetes medicines as savings card dynamics should cease to have a notable effect on realized price comparisons to base periods.
However, continued supply constraints for incretin-based products like Mounjaro and Zepbound have been hurting sales as demand exceeds supply. These delays are expected to have continued to hurt volumes in the second quarter. Lilly is investing in new advanced manufacturing plants and lines in the United States and Europe to increase the supply of Zepbound and Mounjaro to meet rising demand. However, it will take time to bring the increased capacity fully online. Lilly expects production of incretin-based products to increase from the second half of 2024.
The Zacks Consensus Estimate for Mounjaro sales is $2.34 billion, while our model estimate is $2.46 billion. Our model estimate for Zepbound is $700 million.
Year to date, Lilly’s stock has risen 35.3% compared with an increase of 18.8% for the industry.
Image Source: Zacks Investment Research
Tirzepatide faces strong competition from Novo Nordisk’s (NVO - Free Report) drug semaglutide. Semaglutide is approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. Despite supply challenges, Wegovy is seeing strong prescription trends and is generating impressive revenues and profits for Novo Nordisk.
Other than Mounjaro and Zepbound, higher demand and volume growth for Lilly’s key growth drugs like Verzenio, Jardiance, Emgality, Taltz and others are likely to have provided top-line support. While volumes are expected to have increased for most drugs, lower realized prices are likely to continued hurting sales of most drugs like Trulicity.
Trulicity sales are likely to have been hurt by lower volumes and increased competition. Intermittent delays in fulfilling orders are likely to have hurt Trulicity volumes in the United States. In international markets, Trulicity volumes are being affected by the company’s measures to manage strong demand amid tight supply. Doctors have been asked not to start new patients on Trulicity in order to minimize disruption to existing patients.
The Zacks Consensus Estimate for Trulicity, Taltz, Verzenio, Jardiance, Olumiant and Emgality is $1.25 billion, $758.0 million, $1.24 billion, $792 million, $238 million and $157 million, respectively.
Our estimates for Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality are $1.29 billion, $764 million, $1.28 billion, $818.8 million, $234.0 million and $157.9 million, respectively.
Newer products (products launched from 2022 onwards) like Ebglyss, Jaypirca and Omvoh are likely to have contributed to sales growth.
Last month, Lilly won a long-awaited FDA approval for donanemab, to be sold under the brand name Kisunla, for treating early symptomatic Alzheimer's disease. Lilly is expected to discuss the commercialization plans for Kisunla on the second-quarter conference call.
The Zacks Consensus Estimate for Lilly’s total sales and earnings is pegged at $9.83 billion and $2.64 per share, respectively.
Key Recent Events
On Jul 8, Lilly announced a definitive agreement to acquire Waltham, MA-based small biotech Morphic Therapeutics (MORF - Free Report) for approximately $3.2 billion. The acquisition will expand Lilly’s pipeline in immunology, a core area for the company, by adding Morphic’s oral integrin therapies for treating serious chronic diseases.
Morphic's lead pipeline candidate is MORF-057, an oral α4β7 inhibitor with the potential to improve outcomes in treating inflammatory bowel disease (IBD), which includes two conditions — Crohn's disease (“CD") and ulcerative colitis (“UC”). MORF-057 is being evaluated in two phase II studies in UC and one phase II study in CD. The transaction has been approved by the boards of directors of both companies and is expected to close in the third quarter of 2024.
Zacks Rank
Eli Lilly has a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Eli Lilly and Company Price and Consensus
Eli Lilly and Company price-consensus-chart | Eli Lilly and Company Quote