Health
Mounjaro maker Eli Lilly soars as the Gold Rush weight loss drug intensifies
Topline
Pharma giant Eli Lilly reported strong demand Thursday for its weight-loss and diabetes drugs Zepbound and Mounjaro, exceeding analyst expectations in the face of growing competition in the lucrative weight-loss drug market, which is struggling to increase supply and address shortages.
Eli Lilly is struggling to keep up with demand for its weight-loss and diabetes drug tirzepatide.
Key facts
Eli Lilly reported second-quarter 2024 revenue of $11.3 billion and net income of $2.97 billion.
Performance exceeded consensus analyst estimates of $9.97 billion and $2.48 billion, respectively, according to FactSet.
Lilly reported earnings per share of $3.28, beating expectations of $2.74, and raised the range of its annual forecast from $2.05 to earnings per share between $15.10 and $15.60.
This figure marks an increase of 36% in revenue and 68% in profit from the same period last year, when Lilly reported $8.31 billion in revenue and $1.76 billion in profit.
Quarterly sales of Lilly’s popular weight-loss drug Zepbound, which was unavailable in the second quarter of last year, exceeded $1 billion for the first time (Lilly received $1.24 billion for the drug in the second quarter) and sales of the diabetes injection Mounjaro came came in at $3.09 billion, up from $980 million from last year’s second quarter.
Shares of Lilly rose 10% in premarket trading after the report dropped.
Important background
Analysts estimation the market for weight-loss drugs could reach $130 billion by the end of the decade. Currently, Danish giant Novo Nordisk and Lilly enjoy a virtual duopoly and both companies have become some of the most valuable in the world, while Novo slumped on its latest gains as it cut its profit outlook for the year amid mounting pressure to to alleviate supply constraints. Experts told Forbes they are well positioned to defend themselves against rivals racing to stake their own claims. Novo and Lilly haven’t come close to meeting the rising demand for the drugs and there has been a supply shortage for almost as long as they’ve been on the market, prompting them to open up space rivals, including giants like Roche, Pfizer and Amgen and newcomers. as Zeeland Pharma and Viking Therapeutics hope to fill. Weight loss pills, where Novo and Lilly also have an edge, will likely open a new frontier, offering a new and easier way to deliver the drugs currently available only by injection.
What to pay attention to
While Lilly did secured approximately 40% of the weight loss market with Zepbound, it is already laying the foundation to ensure its dominance in the sector in the coming years. The company has two promising drugs in late-stage clinical trials that it hopes will give it an edge: an oral weight-loss pill, orfoglipron, and a hormone-mimicking injection, retatrutide. Results for the slimming pill are expected next year and the results for the obesity shot sometime in 2026. Lilly has done that four other experimental drugs in early or mid-stage studies.
Tangent
In addition to developing new drugs and new delivery methods, discovering new ways to utilize existing drugs is an active area of research that is likely to influence the future of the weight-loss drug market. Tirzepatide and semaglutide belong to a class of drugs called GLP-1 agonists, which help regulate blood sugar levels and appetite. They were initially approved for the treatment of diabetes, but their indications were later expanded to include weight loss and, for Novo, cardiovascular problems. More and more research shows that they can also be used to treat many other conditions, including addiction, Parkinson’s and kidney disease. Lilly is actively pursuing to add sleep apnea treatment to Zepbound’s label following promising clinical trials. If approved, it would become the first pharmaceutical treatment to address the underlying cause of the condition.
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