GLP-1 Effect: Eli Lilly and Company (LLY) Smashes Q3 2023 Revenue Expectations on Weight Loss Drug Tailwind

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The GLP-1 mania is in full swing now, as evidenced by Eli Lilly and Company (NYSE: LLY) smashing consensus expectations for its top-line and bottom-line metrics in Q3 2023, aided by the soaring demand for its Mounjaro weight loss drug.

Eli Lilly and Company (NYSE: LLY) Earnings Release for the Third Quarter of 2023

For the three months that ended on the 30th of September, Eli Lilly and Company has reported $9.50 billion in revenue, comfortably beating consensus expectations of around $9.0 billion.








The following snippet from the company’s earnings release gives a granular look at the company’s sales:

Eli Lilly and Company Revenue Breakdown

Eli Lilly and Company goes on to note:

“For Q3 2023, worldwide Mounjaro revenue was $1.41 billion. U.S. revenue was $1.28 billion reflecting higher realized prices due to decreased utilization of savings card programs as access continues to expand and increased demand. In Q3 2023, Lilly experienced intermittent delays fulfilling orders of certain Mounjaro doses given significant demand, which affected volume. Revenue outside the U.S. was $132.4 million.”

The drug company reported $0.10 in non-GAAP EPS, handily beating consensus expectations of a non-GAAP loss of around 15 cents.

As far as guidance is concerned, Eli Lilly and Company continues to expect to earn full-year revenue of between $33.4 billion and $33.9 billion for the entirety of 2023. However, the company has reduced its guidance for the FY 2023 EPS to a range that bears $6.60 as its midpoint vs. a prior midpoint of $9.80 per share. This change has been primarily driven by one-time accounting charges of around $3.30 per share.

At the time of publication, Eli Lilly and Company are nominally in the red, with shares down just 0.57 percent. This modest weakness is due to a reduction in the company’s FY 2023 EPS guide.

Earnings Context

The FDA approved Eli Lilly & Company’s Mounjaro injections in 2022 to treat type-2 diabetes in conjunction with obesity. Mounjaro targets two hormones – GLP-1 as well as glucose-dependent insulinotropic polypeptide (GIP) – to achieve superior blood sugar control. When used in conjunction with insulin, clinical trials showed an average weight loss of 23 pounds. The drug company’s latest offering, Retatutide, is currently undergoing clinical trials. The drug targets three different hunger-regulating hormones: GLP-1, GIP, and Glucagon. As per the results of Retatutide’s phase two trials, the drug can lead to an average loss of 24.2 percent of body weight in adult patients after 48 weeks of the treatment, with injections administered once every week.

As we noted in a previous post, JP Morgan recently estimated that the annual sales of GLP-1 drugs in the US are expected to reach around $100 billion by 2030, with Eli Lilly and Company and Novo Nordisk holding around 80 percent of the market share by the end of this decade. Around 7 percent of the total population in the US is expected to be using these drugs in the next 10 years.

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