4 Key Takeaways From Eli Lilly’s Earnings

Eli Lilly (LLY) shares soared Thursday, after the company’s second-quarter earnings surpassed expectations on booming demand for its weight-loss drugs and executives provided updates on production capacity and more.

Demand for Weight-Loss Drugs Fuels Growth

Sales of Eli Lilly weight-loss drug Mounjaro more than tripled year-over-year to $3.09 billion in the quarter. Sales of Zepbound, another weight-loss drug, have reached $1 billion in less than a year since the drug received FDA approval in November 2023.

“U.S. demand for Mounjaro and Zepbound is strong and growing as access and supply continue to expand. While weekly prescription volume was volatile in the first half of the year due to challenges fulfilling high demand, our progress on supply gives us confidence in our outlook,” CEO David Ricks said in the company’s earnings call.

Several Supply Milestones Reached, But Shortages Still Possible

Ricks said the company is starting to see the benefits of the roughly $18 billion Eli Lilly has spent since 2020 in building, upgrading, or acquiring manufacturing facilities across the U.S. and Europe. He highlighted one project announced during the second quarter, a $5.3 billion commitment to bring its total investment to $9 billion in an Indiana facility where Eli Lilly plans to make ingredients for Zepbound and Mounjaro.

Interim CFO Gordon Brooks said Eli Lilly reached “a number of supply related milestones” in the quarter, which gives the company “improved clarity” on its expansion of production, and how well it will be able to launch Mounjaro in markets other than the U.S. However, Brooks said high demand for the products could still create “periodic supply tightness.”

Trials of Weight-Loss Drugs Showing Other Benefits

Recent trials have also shown that Zepbound could provide benefits other than weight loss, from reducing the risk of severe cardiovascular incidents to reducing the severity of sleep apnea.

Eli Lilly executives said Thursday they expect to submit recent clinical trial findings on Zepbound’s impact on heart conditions to the FDA and other regulators sometime this year. They said the application to let Zepbound be prescribed to help treat sleep apnea has been submitted to regulators, with a decision from the FDA expected before the end of 2024.

Alzheimer’s Drug Gets FDA Approval

Eli Lilly received approval for Kisunla last month, a monthly IV infusion drug that showed the ability to slow the progression of Alzheimer’s in clinical trials.

Eli Lilly Chief Scientific Officer Dan Skovronsky said Thursday that the company is “delighted to see” Kisunla has already started to be prescribed since its approval last month, and noted that the medication is “broadly covered” for Medicare patients.

Eli Lilly shares rose nearly 10% to $845.31 Thursday, contributed to the stock’s 45% gain since the start of the year.