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Key Takeaways
- Eli Lilly will report third-quarter earnings Wednesday morning, with the focus remaining on the production and sales of its popular weight-loss drugs Mounjaro and Zepbound.
- The company expects to report about $2.8 billion in costs related to research and development for the quarter, similar to last year's third quarter.
- Its weight-loss drugs were removed from the FDA's shortage list during the quarter, while the company launched lower-cost single-use vials of Zepbound.
As pharmaceutical giant Eli Lilly (LLY) plans to report third-quarter earnings Wednesday morning, analysts are focused on the production and sales of Mounjaro and Zepbound—two popular weight-loss drugs that have boosted the company's results.
Analysts polled by Visible Alpha expect a 28% year-over-year revenue jump to $12.2 billion. Eli Lilly is projected to swing to $1.7 billion in net income from a $57.4 million net loss last year, when it reported a charge of nearly $3 billion related to "in progress research and development" (IPR&D) as it closed a number of acquisitions.
| Analyst Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
| Revenue | $12.18 billion | $11.3 billion | $9.50 billion |
| Earnings Per Share (Loss) | $1.87 | $3.28 | (6 cents) |
| Net Income (Loss) | $1.69 billion | $2.97 billion | ($57.4 million) |
Key Metric: Research and Development Costs, Guidance
Ahead of Wednesday's earnings announcement, Eli Lilly said it expects to report an IPR&D charge of about $2.83 billion for the quarter, well above the $154 million and $111 million, respectively, the company reported for the first two quarters of the year.
In each of its first two quarters this year, Eli Lilly lifted its full-year outlook on the strength of sales for its weight loss drugs.
Deutsche Bank analysts wrote last week that they believe the drugmaker will affirm its outlook rather than raise it again. The analysts cited a shifting production environment for Eli Lilly's weight loss drugs, and said sales may have slowed in parts of the U.S. because of the impact of Hurricane Helene on some pharmacies in the Southeast U.S in the quarter.
Business Spotlight: Mounjaro, Zepbound No Longer in Shortage
The company's weight loss drugs were dropped from the Food and Drug Administration's (FDA) shortage list during the quarter, as the agency currently notes the shortage of Mounjaro and Zepbound's active ingredient tirzepatide as "resolved."
Both Eli Lilly and Danish drugmaker Novo Nordisk (NVO) have seen their sales surge over the last several quarters as demand has spiked for their weight loss drugs, with each company spending billions to increase production to meet demand.
Eli Lilly said in its second quarter earnings call that its supply of the drugs should improve through the back half of 2024, but said it could still face "periodic supply tightness" as demand remained high. The company also launched a lower-cost and easier-to-produce version of Zepbound in the quarter.
Eli Lilly shares edged higher Monday, finishing just under $896. The stock is up more than 50% this year.
Read the original article on Investopedia.