10-QPeriod: Q2 FY2022

ELI LILLY & Co Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 4, 2022For Securities:LLY

Summary

Eli Lilly and Company (LLY) reported its financial results for the second quarter and first half of 2022. For the three months ended June 30, 2022, revenue was $6.49 billion, a decrease of 4% compared to the prior year, impacted by lower realized prices and foreign exchange rates, though partially offset by increased volume. Net income for the quarter was $952.5 million, or $1.05 per diluted share, a decrease from $1.39 billion ($1.53 per diluted share) in the same period last year. For the first six months of 2022, revenue increased by 6% to $14.30 billion, while net income saw a modest increase of 4% to $2.86 billion, or $3.16 per diluted share. The company's performance was influenced by several factors, including strong volume growth in key products like Trulicity, Taltz, and Verzenio, which helped drive the year-to-date revenue increase. However, the decline in revenue for the quarter was significantly impacted by the substantial decrease in sales of COVID-19 antibodies and the ongoing generic competition for Alimta. Research and development expenses saw an increase, reflecting continued investment in late-stage assets. The company also noted substantial charges related to acquired in-process R&D and development milestones, primarily associated with a buy-out of future obligations for a PI3Kα inhibitor.

Financial Statements
Beta

Key Highlights

  • 1Revenue for the three months ended June 30, 2022, was $6.49 billion, a 4% decrease year-over-year, primarily due to lower prices and foreign exchange rates, partially offset by volume increases.
  • 2Revenue for the six months ended June 30, 2022, increased 6% to $14.30 billion, driven by higher volume.
  • 3Diluted EPS for Q2 2022 was $1.05, down from $1.53 in Q2 2021, while H1 2022 EPS was $3.16, up from $3.01 in H1 2021.
  • 4Key growth drivers included increased volume for Trulicity, Verzenio, Taltz, and Jardiance.
  • 5Revenue from COVID-19 antibodies significantly decreased year-over-year, impacting overall quarterly performance.
  • 6Acquired IPR&D and development milestones were substantial in Q2 and the first half of 2022, driven by buy-outs and a Priority Review Voucher.
  • 7The company continues to invest in its late-stage pipeline, with R&D expenses increasing by 8% in Q2 2022.

Frequently Asked Questions

The decrease in revenue for the second quarter of 2022 was primarily driven by lower realized prices and the unfavorable impact of foreign exchange rates. This was partially offset by increased sales volume for key products.

In the first half of 2022, products like Trulicity, Taltz, Humalog, Verzenio, and Jardiance showed strong volume growth in the U.S. and internationally, contributing to the overall revenue increase.

Sales of COVID-19 antibodies significantly decreased year-over-year. While they contributed substantially in the prior year, their revenue for the first six months of 2022 was $1.60 billion, compared to $959.1 million in the same period of 2021. This decline impacted the overall year-over-year revenue comparison for the quarter.

Research and development expenses increased by 8% in the second quarter and 2% for the first six months of 2022. This increase is primarily attributed to higher development expenses for late-stage assets, partially offset by lower development expenses related to COVID-19 antibodies.