10-QPeriod: Q1 FY2024

ELI LILLY & Co Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 30, 2024For Securities:LLY

Summary

Eli Lilly and Company (LLY) reported robust financial results for the first quarter of 2024, with total revenue reaching $8.77 billion, a significant 26% increase year-over-year. This growth was largely driven by strong performance in key products like Mounjaro, Zepbound, Verzenio, and Jardiance, despite supply constraints for some incretin medicines. Net income surged by 67% to $2.24 billion, translating to diluted earnings per share of $2.48, a 66% increase from the prior year's first quarter. The company continues to invest heavily in research and development, with R&D expenses increasing by 27% to $2.52 billion, reflecting its commitment to pipeline expansion. Marketing, selling, and administrative expenses also saw an increase of 12%. Despite increased operational costs, Eli Lilly demonstrated improved profitability, with gross margin as a percentage of revenue rising to 80.9%, up from 76.6% in the prior year's comparable quarter, attributed to favorable pricing and product mix. The company's financial position remains strong, with sufficient liquidity to fund operations and planned capital expenditures.

Financial Highlights

48 data points
Beta

Revenue

$8.77B

80.9% Gross Margin

Net Income

$2.24B

25.6% Net Margin

EPS (Diluted)

$2.48

Total Assets

$63.94B

Cash & Equivalents

$2.46B

Free Cash Flow

$1.17B

Financial Statements
Beta
Revenue$8.77B
Cost of Revenue$1.67B
Gross Profit$7.09B
SG&A Expenses$1.95B
Interest Expense$179.60M
Net Income$2.24B
EPS (Basic)$2.49
EPS (Diluted)$2.48
Shares Outstanding (Basic)900.80M
Shares Outstanding (Diluted)903.80M

Key Highlights

  • 1Revenue surged 26% year-over-year to $8.77 billion, driven by strong sales of Mounjaro, Zepbound, Verzenio, and Jardiance.
  • 2Net income increased significantly by 67% to $2.24 billion, with diluted EPS rising 66% to $2.48.
  • 3Gross margin improved to 80.9% of revenue, up from 76.6% in Q1 2023, due to higher realized prices and a favorable product mix.
  • 4Research and Development (R&D) expenses increased by 27% to $2.52 billion, underscoring continued investment in the pipeline.
  • 5Sales of Mounjaro and Zepbound (incretin medicines) showed substantial growth, though supply constraints remain a factor.
  • 6Zepbound, launched in late 2023, generated $517.4 million in U.S. revenue in its first full quarter.
  • 7The company issued $6.5 billion in fixed-rate notes in February 2024 to support general business purposes.

Frequently Asked Questions

The primary drivers of Eli Lilly's revenue growth were increased sales volume and higher realized prices, particularly from Mounjaro®, Zepbound®, Verzenio®, and Jardiance®. The strong demand for its incretin medicines, Mounjaro and Zepbound, significantly contributed to the revenue increase, although supply constraints limited the full realization of this demand.

Eli Lilly is actively expanding manufacturing capacity to meet the high demand for its incretin medicines. They expect supply to remain tight in the short to mid-term, with sales growth primarily dependent on production volume. Measures include prioritizing existing patients and managing launch timing in new markets.

Eli Lilly continues to prioritize and increase its R&D investment, with R&D expenses rising by 27% in Q1 2024. This reflects substantial investments in late-stage assets and early-stage research, indicating a strong commitment to developing new medicines.

Eli Lilly acquired POINT Biopharma for $1.04 billion in December 2023. While the acquisition added goodwill and intangible assets, the results of operations attributable to POINT for the first quarter of 2024 were not material to the consolidated financial statements.