Lilly rides Mounjaro and Zep heads for better-than-expected first-quarter profit despite supply issues

Rapidly rising sales of new obesity drug Zepbound and its diabetes counterpart, Mounjaro, helped Eli Lilly post a better-than-expected profit in the first quarter.

The pharmaceutical maker also raised its 2024 forecast well beyond analyst expectations after Mounjaro’s sales more than tripled in the first quarter of the year.

Lilly said it was still grappling with supply issues that also hampered the company in the fourth quarter, with strong demand for both drugs outpacing production increases. But the company expects its most significant increases to occur in the second half of the year.

Lilly shares jumped Tuesday after the company detailed results.

Indianapolis-based Eli Lilly and Co. reported $517 million in revenue from Zepbound, which received approval from U.S. regulators last November.

Mounjaro’s total sales more than tripled to $1.81 billion, up from $568 million in the year-ago quarter.

Sales of breast cancer treatment Verzenio also jumped 40% to $1 billion in the quarter.

These drugs helped the company’s total revenue increase 26% to $8.77 billion. But Wall Street expected a little more. Analysts had forecast revenue of $8.94 billion, according to a FactSet survey.

A 26% drop in Trulicity sales blunted some of the company’s gains from Mounjaro and Zepbound. Lilly said it also faced supply constraints for diabetes treatment.

Lilly also spent more money during the quarter, as the company’s research and development costs jumped 27%. Marketing, sales and administrative expenses also increased by 12% due to drug launches.

Overall, Lilly’s net income jumped 67% to $2.24 billion. Earnings adjusted for non-recurring items were $2.58 per share.

Wall Street expected $2.47 per share.

For the full year, Lilly raised its adjusted earnings per share guidance range by more than a dollar. It now expects earnings of between $13.50 and $14 per share. That would more than double the company’s total of $6.32 per share starting in 2023.

Analysts expect adjusted earnings of $12.49 per share.

Shares of Lilly jumped nearly 7% to $787.64 after markets opened Tuesday morning, just a few dollars shy of their all-time high. Broader indexes slipped.

The stock had already climbed 26% this year. It surpassed $800 in early March, setting a new all-time high.