Eli Lilly lifts 2024 sales view by $2 billion on weight-loss drug demand

Eli Lilly raised its annual revenue forecast by $2 billion on Tuesday due to strong demand and a steady ramp up of production of its weight-loss treatment Zepbound and related diabetes drug Mounjaro, lifting its shares about 7%. Lilly said it expects the drugs to remain in tight supply, but plans for significant production increases in the second half of the year.

Eli Lilly raised its annual revenue forecast by $2 billion on Tuesday due to strong demand and a steady ramp up of production of its weight-loss treatment Zepbound and related diabetes drug Mounjaro, lifting its shares about 7%. Lilly said it expects the drugs to remain in tight supply, but plans for significant production increases in the second half of the year. Sales growth for the weight-loss and diabetes treatments will primarily depend on how much it can produce and ship in the short- to mid-term, the company said.

"Our top priority is making more product and we're doing everything we can to do that", CEO David Ricks told CNBC. Skyrocketing demand for Mounjaro and Zepbound, both chemically known as tirzepatide, has propelled the Indianapolis-based drugmaker's market value above $700 billion - surpassing both Tesla and Walmart.

"We expect this increased clarity on production capacity and guidance raise will be well received by the Street," JP Morgan analyst Chris Schott said. However, supply for the drugs remains constrained. Most doses of Mounjaro and Zepbound are expected to be available in limited amounts through the second quarter, according to the U.S. Food and Drug Administration's website.

Ricks said the production of these drugs was a capital intensive, technically complex and highly regulated process. "We're pulling out all stops to produce more, but the lag time is significant."

Zepbound brought in first-quarter sales of $517.4 million, ahead of analysts' expectations of $418.20 million, according to LSEG data. Sales of Mounjaro jumped to $1.81 billion from $568.5 million last year, driven by strong demand and higher prices of the drug as patients moved away from the company's savings program.

Mounjaro sales, however, came in below lofty Wall Street estimates of $2.08 billion, which analysts attributed to limited supply. Eli Lilly now expects 2024 revenue of $42.4 billion to $43.6 billion, up from its prior forecast of $40.4 billion to $41.6 billion.

Eli Lilly also raised its annual profit forecast by $1.30 per share to a range of $13.50 to $14 per share. The company reported an adjusted profit of $2.58 per share, topping analysts' expectations by 12 cents.

Shares of the drugmaker, which are up 26% so far this year, jumped another 7% to $788.30 in premarket trading.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)