Eli Lilly’s Strong Finish to 2023

Eli Lilly (LLY), one of the pharmaceutical giants, concluded 2023 on a high note, surpassing analyst expectations with its Q4 earnings report. In this article, we delve into the details of Eli Lilly’s impressive performance in the final quarter of 2023, highlighting key factors contributing to its success, its top-performing drugs, and the outlook for the future.

A Stellar Q4 Performance

Eli Lilly reported a robust Q4 earnings report that left analysts impressed. The company achieved its third consecutive double-digit earnings per shareEarnings per share (EPS) is a fundamental financial metric that provides valuable insights into a company's profitability. This widely used indicator helps investors and analysts g... More (EPS) beat, reflecting its consistent growth and resilience in a dynamic pharmaceutical market. Key highlights of Eli Lilly’s Q4 performance include:

• 28.1% Year-on-Year Revenue Growth: The company’s revenue surged by an impressive 28.1% year-on-year, reaching a total of $9.35 billion in Q4. This substantial growth underscores Eli Lilly’s ability to deliver value to both patients and investors.
• Price-Driven Growth: Much of the revenue growth in Q4 was attributed to higher selling prices for its drugs. Specifically, the 28% revenue increase was driven by a remarkable 16% surge in realized prices, highlighting the strength of Eli Lilly’s product portfolio.
• Volume and FX Impact: Volume growth also played a significant role in the revenue boost, contributing 11% to the overall growth. Additionally, favorable foreign exchange (FX) rates added the remaining 1% to the revenue growth.

U.S. Dominance and Weight Loss Drugs

Eli Lilly’s dominance in the U.S. pharmaceutical market was particularly evident in Q4. The company witnessed a substantial revenue increase in the U.S., which surged by 39% year-on-year to reach $6.46 billion. This remarkable growth was driven by a 27% increase in drug prices and a 12% rise in drug volume.

Mounjaro: Among its portfolio, Mounjaro, an antidiabetic medication primarily used for weight loss, played a pivotal role. In Q4, Mounjaro emerged as Eli Lilly’s largest revenue generator, contributing $2.2 billion in sales, a significant leap from just $279 million in the previous year. The rapid growth of Mounjaro’s sales positions it as a key driver of Eli Lilly’s revenue in 2024, should current growth rates persist.

Other Top Performers: Trulicity, a diabetes and weight loss drug, and Verzenio, a breast cancer pill, also delivered remarkable results. Trulicity generated $1.67 billion in revenue, despite a 14% year-on-year decline, while Verzenio saw its revenue increase by an impressive 42% year-on-year, reaching $1.15 billion.

Trulicity in 2023: Trulicity maintained its position as Eli Lilly’s top-selling drug for the entire year of 2023, with total sales of $7.13 billion. Although it experienced a 4% decline in sales compared to the previous year, it remained a significant revenue contributor.

Zepbound’s FDA Approval and Future Prospects

Eli Lilly’s outlook for the future is also influenced by Zepbound, a weight loss drug that received FDA approval for obesity in Q4. This milestone was significant for the company, and Zepbound recorded sales of $175.8 million in the same quarter. Notably, Zepbound is a weekly injection that shares the same active ingredient as Mounjaro, further strengthening Eli Lilly’s position in the GLP-1 class of drugs, which have gained popularity for weight loss treatment in the United States. Other notable drugs in this class include Wegovy and Ozempic, owned by Novo Nordisk.

Investor Sentiment and Conclusion

Eli Lilly’s strong performance in Q4 2023 and its exposure to the growing market for GLP-1 obesity drugs have fueled investor enthusiasm. The recent FDA approval of Zepbound has added to the excitement surrounding the company’s prospects. Consequently, Eli Lilly’s stock has experienced a substantial upward trend over the past year, reflecting investor optimism.

While the positive results from Q4 were anticipated and may have already been priced into the stock, the company’s continued growth trajectory and innovative drug portfolio suggest that Eli Lilly is well-positioned to deliver value to both patients and investors in the coming years. Overall, Eli Lilly’s strong finish in 2023 sets a promising tone for its future endeavors in the pharmaceutical industry.