New Diabetes Drug
Eli Lily (LLY) has experienced a “hiccup in the road” for its new diabetes treatment, Mounjaro, an analyst said Thursday as LLY shares tumbled.
Mounjaro’s sales came in at $279.2 million, missing expectations of $288-370 million, according to various analyst calls. Lilly’s slides indicate Mounjaro is now covered for about 50% of Commercial Insurance and Medicare Part D beneficiaries, up from just 45% in the third quarter, SVB Securities analyst David Risinger said in a note. to customers.
Additionally, sales of Lilly’s largest diabetes drug, Trulicity, were also lower than expected at $1.94 billion, although they were up 3%. Analysts expected $2.07 billion to close to $2.1 billion, Risinger said.
But Edward Jones analyst John Boylan says the fall in LLY shares is an overreaction. He notes that Lilly is also testing Mounjaro as a treatment for obesity, sleep apnea, and other diabetes-related illnesses. Ahead of today’s stock market opening, Lilly shares fell 5.7% near 323.20.
“Demand remains strong for Trulicity and Lilly had issues keeping up with orders,” he said in a note. “We believe the same is true for Mounjaro. As manufacturing capacity for these key products increases, this issue will likely dissipate.”
He added: “The results for this quarter can be seen as a bump in the road.”
Stock LLY: Covid antibodies weigh on sales
Overall fourth-quarter sales fell 9% to $7.3 billion as Lilly’s Covid antibody revenue took a huge hit. Excluding the impact, sales were actually up 5%, Lilly said in a press release. Sales were a hair below expectations at $7.33 billion, according to FactSet.
Adjusted earnings fell 4% to $2.09 per share, but easily beat expectations between $1.78 and $1.87. SVB’s Risinger noted that Lilly experienced a much lower tax rate than expected, which helped support adjusted earnings of 15 cents per share.
Breast cancer drug Verzenio posted the best growth, doubling year-over-year to $808 million. That was well over forecast by $706 million to $725 million, he said. On the other hand, Lilly’s Covid antibody revenue fell 96% to $38 million. Although stock analysts at LLY were expecting a drop, it was much steeper than the $102-200 million sell calls.
Lilly raised its earnings outlook for the year to $8.35 – $8.55 per share, less certain items. Analysts were expecting $8.35 per share. The company maintained its sales forecast of $30.3 billion at $30.8 billion, in line with LLY stock analysts’ forecast for $30.47 billion.
LLY stock recently slipped below a flat bottom with a buy point of 375.35, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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