Eli Lilly Reclaims $1 Trillion Market Cap on Strong Zepbound-Driven Earnings

[Financial News]


Eli Lilly, which manufactures the obesity treatment Zepbound, saw its stock jump more than 9% on the 4th. Its market value also climbed back above $1 trillion.
In contrast to Danish rival Novo Nordisk, whose shares plunged on gloomy guidance the previous day, Lilly, the world’s largest pharmaceutical company by market capitalization, demonstrated that it is on a very different trajectory thanks to stellar results and upbeat forecasts.
Lilly’s performance stood out even more because big tech stocks were struggling that day amid the shock from Advanced Micro Devices (AMD).

Lilly’s fourth-quarter results for last year, released after the market closed the previous day, were exceptional. Revenue came in at $19.3 billion, with adjusted earnings per share (EPS) of $7.54.
Sales soared 43% from a year earlier and easily beat Wall Street analysts’ consensus estimate of $17.9 billion. Adjusted EPS also topped the market forecast of $6.91.
The company’s guidance for this quarter’s revenue and adjusted EPS likewise exceeded market expectations.
Analysts had projected revenue of $77.6 billion and adjusted EPS of $33.04, but Lilly said it expects revenue of $80–83 billion and adjusted EPS of $33.50–35.00.

Lilly’s blockbuster obesity and diabetes drugs are powering its results on both fronts.
Sales of the diabetes drug Mounjaro and the obesity treatment Zepbound more than doubled from a year earlier. Mounjaro generated $7.4 billion in revenue, while Zepbound brought in $4.3 billion.
Buoyed by these blockbuster-driven surprise earnings, Lilly’s share price climbed as high as $1,106 intraday, pushing its market capitalization above $1.05 trillion. The company thus regained the $1 trillion mark it had lost since November last year.

Unlike Novo Nordisk, which is under pressure from aggressive latecomers and looming patent expirations, Lilly still appears to have some breathing room.
The company is working to shift its injectable drugs Mounjaro and Zepbound from once-weekly dosing to once-monthly dosing. It is also accelerating development of oral drugs to replace injections.
Lilly has completed clinical trials for oral obesity and diabetes medications and is now seeking regulatory approval in the United States, Japan, and Europe.
The company is also strengthening its price competitiveness.
Patients paying cash can receive a low-dose Zepbound prescription for $299 per month.
This has been made possible by Lilly’s direct-to-consumer platform called "LillyDirect." By bypassing the traditional chain of manufacturer, wholesaler, pharmacy, and consumer, Lilly allows patients to have medicines shipped directly from the manufacturer.
By cutting distribution margins, the company can lower consumer prices, while also collecting patient data directly and improving customer management.
It also serves as a preemptive response to drug price reduction pressures from the administration of former U.S. President Donald Trump.

dympna@fnnews.com Song Kyung-jae Reporter