Eli Lilly stock briefly retook its 50-day line Thursday after its diabetes and weight-loss drugs walloped sales expectations, leading the company to hike its full-year outlook.
Sales of Mounjaro, Lilly's biggest moneymaker, skyrocketed more than 215% to $3.09 billion, crushing expectations for $2.43 billion. Weight-loss drug Zepbound brought in $1.24 billion, smashing Street projections for $927 million. Zepbound and Mounjaro use the same active ingredient, tirzepatide.
"We were expecting to see strong momentum in its diabetes/weight-loss drugs," Edward Jones analyst John Boylan said in a note to clients. "However, this was an impressive quarter that went well beyond our expectations."
Eli Lilly stock surged 9.5% to 845.31. Shares briefly rose above their 50-day moving average after severely undercutting that mark in late July, according to MarketSurge.
Eli Lilly Stock Boosted By Sales, Profit Beat
The success of Mounjaro and Zepbound led to a strong second-quarter beat. Total sales advanced 36% to $11.3 billion, beating expectations by more than $1.3 billion. Lilly earned $3.92 a share, minus some items. Earnings rocketed 86% and topped expectations for $2.74, according to FactSet.
But revenue from diabetes treatment Trulicity came in light at $1.25 billion, down 31%. Eli Lilly stock analysts called for a stronger $1.47 billion. Like tirzepatide-based drug Mounjaro and Zepbound, Trulicity mimics the GLP-1 hormone to improve feelings of satiety and markers of glucose.
Fewer patients used Trulicity due to "competitive dynamics and supply constraints," Lilly said in its news release. Wholesalers partially offset that through stocking some doses. Mounjaro, on the other hand, enjoyed "continued strong demand, improved channel dynamics and higher realized prices."
Boylan, the Edward Jones analyst, says Lilly has done an excellent job boosting manufacturing capacity to meet rising demand in a short amount of time.
"There may have been some inventory building at some customers this quarter as a result, but still it is a solid result overall," he said.
Rivals Are Looming
The results are in stark contract with Lilly's chief rival Novo Nordisk who, on Wednesday, reported lighter-than-expected sales of its diabetes and weight-loss drugs Ozempic and Wegovy. The company said it expects supply constraints to continue for both drugs.
Lilly and Novo currently own the market for injectable obesity treatments. But others companies — like Amgen, Pfizer, Roche and Viking Therapeutics — are making progress on next-generation approaches to weight loss, including oral meds.
But Boylan expects Eli Lilly to retain its solid lead over approaching competitors.
"We believe Lilly has a head start in manufacturing capacity and developing next-generation drugs," he said. "Additionally, it may take a couple of years to see competition, assuming clinical trials are successful and have competitive data."
Eli Lilly boosted its full-year revenue outlook by $3 billion. The company now expects $45.4 billion to $46.6 billion in sales, "primarily driven by the strong performance of Mounjaro and Zepbound." Sales of Mounjaro are soon expected to kick in from international markets, the company said.
Analysts following Eli Lilly stock called for a lower $43.01 billion in sales this year.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
