Mrinalika Roy and Mariam Sunny
(Reuters) – Eli Lilly raised its full-year profit and revenue forecasts on Thursday as strong international demand for its weight-loss drugs helped the company beat Wall Street's third-quarter profit expectations.
Shares of the world's largest health care company by market value jumped more than 5% in premarket trading, even as investors remain wary of drug price negotiations with the Trump administration.
Lilly is competing with Novo Nordisk for dominance in the weight-loss drug market, which some analysts predict will reach $150 billion by the end of the decade.
Since returning to the White House in January, President Donald Trump has sought to close the gap between what Americans pay for prescription drugs and drug prices in other developed countries, known as the “most favored nation” policy.
Cantor analyst Carter Gould said that while there remain some drug pricing challenges to overcome, the stock will react positively to the results, adding that it was the strongest third-quarter earnings report he's ever seen.
ZEPBOUND, MUNJARO TOP SALES RATINGS
Lilly CEO Dave Ricks credited strong demand for GLP-1 drugs Zepbound and Mounjaro as a reason for the company's strong performance.
The strong quarter “should allay some of the market's concerns about GLP-1 and highlight the underlying strength of Lilly's portfolio,” said JPMorgan analyst Chris Schott.
Analysts had expected some decline in Zepbound's U.S. sales after CVS Health dropped the obesity drug from its list of preferred covered drugs in favor of rival Novo Wegovy.
However, Zepbound reported sales of $3.6 billion for the quarter, beating expectations of $3.23 billion, according to LSEG. The company noted that higher demand in the quarter was partially offset by lower selling prices.
Approved in late 2023, Eli Lilly's weight-loss drug Zepbound, which is also sold as Mounjaro outside the U.S., has quickly gained traction, with prescriptions now well ahead of Wegovy, despite Novo's drug having a more than two-year lead on the market.
Both drugs are in growing demand as millions of people seek effective weight loss methods.
Mounjaro had sales of $6.5 billion, beating analysts' average expectations of $5.73 billion. Zepbound and Mounjaro, also used to treat type 2 diabetes, contain the same active ingredient, tirzepatide.
Guggenheim analysts said Mounjaro's international sales were nearly $1 billion ahead of estimates for the quarter.
Novo will report earnings on November 5th. Its US-listed shares traded down 1.6%.
