Updated: Lilly’s revenues rise 28% in Q2 thanks to surge in demand for diabetes drug Mounjaro

Eli Lilly said its revenues in the second quarter jumped 28% year-over-year due to growth from its type 2 diabetes drug Mounjaro, breast cancer treatment Verzenio, recently expanded diabetes medicine Jardiance and the autoimmune biologic Taltz.

Mounjaro reeled in about $980 million in the three-month stretch, the drugmaker said Tuesday morning, coming in well above the Wall Street consensus of $740 million, TD Cowen analyst Steve Scala wrote in a note.

Revenues climbed to $8.31 billion in the quarter, up from $6.49 billion in the same period of 2022. Analysts had expected about $7.5 billion, Scala wrote. Part of that was due to a $579 million sale of its rights to Baqsimi. US-specific revenue shot up 41%, accounting for $5.53 billion, mainly because of Mounjaro, Lilly said, and ex-US revenue increased by 9%.

Lilly shares $LLY skyrocketed more than 17% in Tuesday morning trading, with the $80 per-share increase sending the pharma’s market capitalization above $500 billion.

The earnings update comes as Lilly nears two FDA approval decisions that could catapult the Indianapolis drugmaker’s revenues much higher in the coming years: By year’s end, Lilly expects FDA nods on a weight loss label expansion for tirzepatide, marketed as Mounjaro for patients with type 2 diabetes, and an approval for its amyloid-targeted Alzheimer’s medicine donanemab. Mounjaro has been prescribed off-label for weight loss, causing supply crunches for various dosages. Lilly said last month the drug helped Phase III trial participants shed up to 26% of their body weight on average. That and the Phase III Alzheimer’s data earlier in the quarter helped prop up Lilly’s stock, making it the world’s largest pharma by market cap at times.

“Lilly has experienced and continues to expect intermittent delays fulfilling orders of certain Mounjaro doses given significant demand. These delays have impacted, and may continue to impact, volume,” Lilly said in its earnings update.

Approvals of those two drugs would put Lilly squarely in the center of the biggest fields of drug development: Alzheimer’s and obesity. Lilly would not be the first in either space. Novo Nordisk leads the weight loss surge, although the Danish drugmaker has run into supply and safety concerns with its drug Wegovy. Tuesday morning it also presented highly anticipated results on semaglutide’s impact on reducing the risk of major adverse cardiovascular events. Meanwhile, Eisai and partner Biogen were first in securing full approval for an anti-amyloid monoclonal earlier this summer. FDA rejected an accelerated nod for Lilly’s donanemab in January as the regulator sought longer duration data.

Work on those late-stage assets contributed to a 32% hike in R&D expenses for the second quarter, going to $2.36 billion, or 28% of revenue, Lilly said. Lilly also ramped up its R&D guidance for the full year, a $600 million increase to the range of $8.9 billion to $9.1 billion as a result of a slate of late-stage studies and preparing for anticipated approvals.

Michael Mason

During the company’s second-quarter earnings call Tuesday morning, Lilly leadership was asked about the potential read-through for Novo’s trial results on other obesity drugs. “This is a fantastic day for people living with obesity,” Lilly diabetes president Michael Mason said on the investor call. “Now, do I think most payers will adopt AOMs [anti-obesity medications] overnight because of the SELECT trial? I don’t think so.

“It should turn the conversation of the benefits of weight loss away from aesthetics and more toward the health benefits of people living with obesity,” Mason said.

Analysts did not ask Lilly about a new lawsuit filed this week from its recently axed partner Nektar Therapeutics.

The quarterly update comes as the pharma digests or nears the closing of four acquisitions in recent months: autoimmune biotech DICE, diabetes cell therapy maker Sigilon, oncology startup Emergence and weight loss drugmaker Versanis. Lilly did not mention the Emergence deal in its earnings and has repeatedly declined to provide further details on the antibody-drug conjugate startup.

Lilly upped its revenue projections for the year by about $2.2 billion. The new expectation is in the range of $33.4 billion to $33.9 billion.

In its earnings presentation, Lilly said it removed two Phase I assets from its pipeline, including an IDH1/2 inhibitor for cancer and a GIP/GLP co-agonist peptide for diabetes.

Editor’s note: This story was updated to include analyst commentary and information from Eli Lilly’s earnings call. 

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