Eli Lilly (LLY) announced a surge in its annual projections, primarily fueled by the rising demand for its novel diabetes medication, Mounjaro. This comes in anticipation of an impending decision regarding Mounjaro's application as a weight-loss drug. The company witnessed an 18% spike in its stock prices, which when combined with the year's preceding 24% climb, potentially positions it to surpass UnitedHealth (UNH) as the globe's top healthcare company in terms of market cap. Notably, the enthusiasm is not just due to Mounjaro's promising trajectory, but also due to prospects surrounding Lilly's investigational Alzheimer's drug, donanemab.
Mounjaro’s Q2 sales exhibited a remarkable 72.3% increment, registering $979.7 million, a figure that comfortably eclipsed analysts’ predictions of $743 million. This upswing can be attributed to a shift in consumer preference from Lilly's discounted savings scheme to commercial insurance platforms offering superior reimbursement rates, elucidated Evan Seigerman from BMO Capital Markets. Furthermore, Mounjaro has gained traction among physicians who are prescribing it off-label as an obesity remedy, with an official U.S. endorsement for this application anticipated later this year.
The pharmaceutical landscape also buzzed with excitement as Novo Nordisk reported that its obesity drug, Wegovy, reduced major cardiovascular incidents like strokes by 20% in a pivotal late-stage study. This result was notably superior to the 15% to 17% forecasted by industry experts and investors. Such heart-related advantages can potentially revolutionize the weight-loss drug market, encouraging broader health insurance inclusion and catering to an expansive patient demographic. "These drugs have evolved from just being weight-loss treatments to offering much more," stated Mohit Bansal, an analyst at Wells Fargo.
In terms of financial metrics, Lilly adjusted its 2023 earnings outlook, raising it by $1.05 to fall between $9.70 and $9.90 per share, while also enhancing its revenue range anticipations by $2.2 billion to span from $33.4 billion to $33.9 billion. The company’s Q2 earnings, excluding specific items, stood at $2.11 per share, surpassing the estimated $1.98. Furthermore, its sales figures for the same period amounted to $8.31 billion, outperforming the projected $7.58 billion.
