Eli Lilly (NYSE:LLY) stock rose 13% overnight after it beat analyst estimates and raised guidance. The company’s GLP-1 drugs for diabetes and weight loss, Zepbound and Mounjaro, propelled the results.
The company reported net income of $2.97 billion, $3.28 per share fully diluted, on revenue of $11.3 billion. Lilly also raised its full-year revenue guidance to $45.4 billion-$46.6 billion and earnings per share guidance to $15.10-$15.40 per share.
The market responded as if Lilly was selling artificial intelligence (AI) chips. Shares jumped over 13% overnight. Before the market opened, they were trading at over $874, and the market capitalization rose to over $825 billion.
The Diabetes Gold Rush
Lilly could predict future success after the Food and Drug Administration (FDA) announced that the drugmaker has resolved its two-year-long shortages of diabetes drugs. By the end of the first quarter, the company had seven sites producing the drugs.
Despite shortages, Mounjaro had sales of $3.1 billion in the second quarter and Zepbound over $1.2 billion. This more than made up for falling sales of older diabetes medication, Trulicity, and slowing growth for another, Jardiance. The company’s other big drugs are Taltz, an autoimmune drug, and the breast cancer drug Verzenio.
The success of the GLP-1 drugs helped Lilly raise the advertising profile of Jardiance and Verzenio.
Lilly stock had a high of $950 per share in July. It fell after Roche (OTCMKTS:RHHBY) saw good results for a weight loss pill in a Phase 1 trial. Lilly’s drugs are taken by injection.
Pfizer (NYSE:PFE), Amgen (NASDAQ:AMGN) and Viking Therapeutics (NASDAQ:VKTX) are working on similar drugs that could be out in a few years. Currently Novo Nordisk (NYSE:NVO) is Lilly’s primary competitor with Ozempic and Wegovy.
LLY Stock: What Happens Next?
The rush to Lilly stock may be tempered by the coming competition, but it’s all good news for those suffering from diabetes and obesity. GLP-1s are to this decade what statins were to the 1990s — true game-changers.
On the date of publication, Dana Blankenhorn 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
