Pharmaceutical giant Eli Lilly (NYSE:LLY) delighted investors with an impressive earnings performance, sending LLY stock to a new all-time high. In particular, the company’s diabetes treatment Mounjaro commanded significant demand, contributing to upgraded guidance. At one point, LLY surpassed the $500 billion market capitalization level before trimming slightly during the early afternoon session.
According to a CNBC report, Eli Lilly posted adjusted earnings per share (EPS) of $2.11 in the second quarter. On the top line, the pharma company rang up sales of $8.31 billion. According to a survey of analysts by Refinitiv, Wall Street was looking for adjusted EPS of $1.98 and revenue of $7.58 billion.
In addition, the company booked net income of $1.76 billion, translating to $1.95 per share. Notably, in the year-ago quarter, Eli Lilly posted net income of $952.5 million or $1.05 per share.
Even better for LLY stock, management now expects full-year revenue to land between $33.4 billion and $33.9 billion. In the prior forecast, the company anticipated sales to hit between $31.2 billion to $31.7 billion.
As well, the pharma sees adjusted EPS to clock in between $9.70 to $9.90. Previously, management called for a range of $8.65 to $8.85.
A Key Therapeutic Sends LLY Stock Flying Higher
While not taking anything away from Eli Lilly’s broad drug pipeline, most of the attention focused on Mounjaro. According to an AP report, the diabetes therapeutic rang up nearly $1 billion in Q2 sales. That’s more than $200 million above what analysts anticipated, sending LLY stock to record heights.
In addition, Mounjaro sales jumped more than 70% against its Q1 tally. Almost all of this $980 million haul stemmed from the U.S. Moreover, the robust demand led to delays in filling orders for some doses, the news agency stated. To address the tight supplies that will lead to some sport shortages through year’s end, Lilly is building a new manufacturing plant in North Carolina.
Naturally, it’s a great problem to have for the pharma, resulting in intense interest in LLY stock. Not only that, analysts anticipate additional utility for Mounjaro, which received a U.S. Food and Drug Administration (FDA) approval at the end of Q2 2022 to treat type 2 diabetes. Specifically, they see potential for the booming weight-loss market. Indeed, doctors have already prescribed Mounjaro off-label for that indication.
At the moment, regulators are deciding whether to green light the therapeutic for weight loss. Earlier this year, Lilly stated that the injectable treatment helped patients with type 2 diabetes who were overweight or obese to lose up to 16% of their body weight over a nearly 17-month period.
Why It Matters
If regulators approve the weight-loss indication, Lilly’s drug would offer a viable alternative to other therapeutics. In particular, popular weight-loss drug Wegovy under Novo Nordisk (NYSE:NVO) would be under the spotlight. However, NVO shares also jumped on Tuesday as Wegovy showed that it cut the risk of serious heart problems by 20%, a better-than-expected result.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
