01—Abstract
Summary
Summary of the 8-K filed April 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Eli Lilly reported first-quarter 2024 results on April 30, 2024 that were strong on the top line and margins.
Revenue rose 26% year over year to $8.77 billiona, driven by volume growth of 16% and higher realized prices of 10%. Growth was led by Mounjaro ($1.81 billion, up from $568.5 million) and the newly launched Zepbound ($517.4 million in its first full quarter of U.S. sales), with Verzenio up 40% and Jardiance up 19%, partly offset by a 26% decline in Trulicity to $1.46 billion. Reported EPS rose 66% to $2.48 and non-GAAP EPS rose 59% to $2.58, both including $0.10 of acquired IPR&D charges.
Gross margin expanded to 80.9% of revenue (82.5% non-GAAP), reflecting higher realized prices and favorable mix. Management raised full-year 2024 revenue guidance by $2.0 billion to $42.4b–$43.6 billion, citing strong incretin demand and better visibility into production expansion. Reported EPS guidance was raised to $13.05–$13.55 and non-GAAP EPS guidance to $13.50–$14.00.
Management noted that demand for Mounjaro and Zepbound continues to exceed supply, with wholesaler backorders at quarter end, and that the most significant production increases are expected in the second half of 2024. Investors should weigh the upside against several watch items: R&D expense rose 27%c to 29% of revenue, Trulicity continues to decline, the EMPACT-MI trial for Jardiance missed statistical significance, and the CYCLONE-3 Verzenio prostate cancer trial was stopped for futility. Future incretin growth depends heavily on how quickly Lilly can expand manufacturing capacity.
02—Key points
Key Highlights
- Q1 2024 revenue grew 26% to $8.77 billion, driven by volume (+16%) and realized pricing (+10%), with U.S. revenue up 28% and international up 22%.
- Mounjaro revenue reached $1.81 billion (vs. $568.5 million), and Zepbound generated $517.4 million in its first full quarter of U.S. sales after its November 2023 launch.
- Reported EPS rose 66% to $2.48 and non-GAAP EPS rose 59% to $2.58, both including $0.10 of acquired IPR&D charges.
- Gross margin improved to 80.9% of revenue (up 4.3 percentage points), driven by higher realized prices and favorable product mix.
- 2024 revenue guidance was raised by $2.0 billion to $42.4–$43.6 billion; reported EPS guidance rose $1.25 to $13.05–$13.55 and non-GAAP EPS guidance rose $1.30 to $13.50–$14.00.
- Demand for incretin medicines exceeded supply, leading to wholesaler backorders at quarter end; significant production increases are expected in 2H 2024.
- Setbacks include a 26% decline in Trulicity to $1.46 billion, R&D expense up 27% to 29% of revenue, the EMPACT-MI Jardiance trial missing statistical significance, and the CYCLONE-3 Verzenio prostate trial stopped for futility.
03—Questions
Frequently Asked Questions
What drove Lilly's first-quarter 2024 revenue growth?
Revenue rose 26% to $8.77 billion, with volume up 16% and realized prices up 10%. Mounjaro and Zepbound were the main drivers, along with Verzenio and Jardiance, partly offset by lower Trulicity sales.
Why did Lilly raise its full-year 2024 guidance?
Management cited strong performance from Mounjaro and Zepbound and greater visibility into its production expansion for the rest of the year. Revenue guidance rose $2.0 billion, and EPS guidance was raised on both a reported and non-GAAP basis.
Is supply still a constraint on incretin sales?
Yes. Demand for Mounjaro and Zepbound outpaced supply, creating wholesaler backorders at quarter end. Management expects tight supply to persist, with the largest production increases expected in the second half of 2024, so near-term sales growth depends mainly on how much Lilly can produce and ship.
Did the Mounjaro price increase reflect a change in list prices?
Not primarily. The higher U.S. realized prices for Mounjaro were attributed mainly to reduced use of savings card programs as access expanded, not to a list price change. Management said these savings card dynamics should stop having a notable effect on price comparisons in the second half of 2024.
What were the notable pipeline setbacks in the quarter?
The EMPACT-MI Phase 3 trial showed a 10% relative risk reduction for Jardiance in heart failure hospitalization or all-cause mortality, but this did not reach statistical significance. The CYCLONE-3 Phase 3 trial of Verzenio in metastatic hormone-sensitive prostate cancer was terminated for futility, and Lilly recorded a charge of about $75 million related to that program.
04—Continue