Summary
Eli Lilly and Company (LLY) reported a solid third quarter of 2022, with revenue reaching $6.94 billion, a 2% increase year-over-year, driven by strong volume growth across key products, especially in the U.S. Diluted Earnings Per Share (EPS) also saw a significant increase of 32% to $1.61. The company's product portfolio continues to perform well, with notable growth in Trulicity, Verzenio, and Jardiance. While the company is investing heavily in research and development ($1.8 billion for the quarter) and faced some headwinds from foreign exchange rates and the phasing out of COVID-19 antibody sales, its overall financial health remains robust, supported by substantial operating cash flow and a strong balance sheet.
Financial Highlights
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Financial Statements
Beta
| Revenue | $6.94B |
| Cost of Revenue | $1.58B |
| Gross Profit | $5.36B |
| R&D Expenses | $1.80B |
| SG&A Expenses | $1.61B |
| Interest Expense | $81.50M |
| Net Income | $1.45B |
| EPS (Basic) | $1.61 |
| EPS (Diluted) | $1.61 |
| Shares Outstanding (Basic) | 900.70M |
| Shares Outstanding (Diluted) | 903.80M |
Key Highlights
- 1Revenue increased by 2% to $6.94 billion for the three months ended September 30, 2022, compared to $6.77 billion in the prior year period.
- 2Diluted Earnings Per Share (EPS) grew by 32% to $1.61 for the third quarter of 2022, up from $1.22 in the same period of 2021.
- 3Key products like Trulicity, Verzenio, and Jardiance demonstrated strong revenue growth, indicating continued market demand and successful commercialization.
- 4Research and Development (R&D) expenses increased by 6% to $1.80 billion, reflecting ongoing investment in the company's robust pipeline, particularly for late-stage assets.
- 5The company acquired Akouos, Inc. for an aggregate of approximately $487 million plus CVRs, expanding its gene therapy portfolio.
- 6Despite a decrease in sales of COVID-19 antibodies, the company's core pharmaceutical business demonstrated resilience and growth.
- 7Total assets decreased slightly to $47.46 billion as of September 30, 2022, from $48.81 billion as of December 31, 2021, while total liabilities also decreased, reflecting prudent financial management.
Frequently Asked Questions
Revenue growth was primarily driven by increased volume from key products such as Trulicity, Verzenio, Jardiance, and Taltz, particularly in the U.S. market. This growth was partially offset by lower realized prices in some areas and unfavorable foreign exchange rates.
Eli Lilly continues to invest significantly in R&D, with expenses increasing to $1.80 billion for the quarter. This investment is focused on late-stage assets and pipeline development, demonstrating the company's commitment to innovation.
The IRA, enacted in August 2022, introduces measures that allow the U.S. government to set prices for certain drugs reimbursed under Medicare Part B and D after a specified period post-approval. This could potentially accelerate revenue erosion for some Lilly products before patent expiry and may influence business strategies, especially regarding small molecule innovation. The full impact is still uncertain.
Eli Lilly is experiencing strong demand for Trulicity, which is challenging their ability to meet demand in international markets. The company is working to expand manufacturing capacity, which is expected to become operational globally over the next several years, with significant expansion planned for 2023.