On October 30, 2024, Eli Lilly and Co (LLY, Financial) released its 8-K filing detailing its financial performance for the third quarter of 2024. Eli Lilly, a prominent drug firm focusing on neuroscience, cardiometabolic, cancer, and immunology, reported a significant increase in revenue, driven by its new products, Mounjaro and Zepbound.
Performance Overview
Eli Lilly reported a 20% increase in revenue for Q3 2024, reaching $11.44 billion, falling short of the analyst estimate of $12,099.82 million. This growth was primarily volume-driven, with Mounjaro and Zepbound contributing significantly. However, the reported earnings per share (EPS) of $1.07 fell short of the analyst estimate of $2.20. On a non-GAAP basis, EPS was $1.18, still below expectations.
Financial Achievements and Challenges
The company's revenue growth was bolstered by a 42% increase when excluding the previous year's divestiture of the olanzapine portfolio. Non-incretin revenue, which includes oncology, immunology, and neuroscience portfolios, grew by 17%. Despite these achievements, the company faced challenges with decreased sales of Trulicity and inventory decreases impacting Mounjaro and Zepbound sales.
Income Statement Highlights
In Q3 2024, Eli Lilly's gross margin increased by 21% to $9.27 billion, with a gross margin percentage of 81.0%. Research and development expenses rose by 13% to $2.73 billion, reflecting continued investment in the company's portfolio. Marketing, selling, and administrative expenses increased by 16% to $2.10 billion, driven by promotional efforts for new product launches.
Key Metrics and Analysis
The effective tax rate for Q3 2024 was 38.9%, compared to 113.4% in Q3 2023, impacted by non-deductible acquired in-process research and development (IPR&D) charges. The company's net income on a reported basis was $970.3 million, a significant improvement from a net loss of $57.4 million in Q3 2023.
Lilly had another strong growth quarter in Q3, with total revenue increasing by 42% after excluding divestiture activity in the same period last year," said David A. Ricks, Lilly chair and CEO.
Product Performance
| Product | Q3 2024 Revenue ($ million) | % Change from Q3 2023 |
|---|---|---|
| Mounjaro | 3,110 | 120% |
| Trulicity | 1,300 | -22% |
| Verzenio | 1,370 | 32% |
| Zepbound | 1,260 | N/A |
Conclusion
Eli Lilly's Q3 2024 results highlight robust revenue growth driven by new product launches, despite challenges in EPS performance. The company's strategic focus on expanding its product portfolio and increasing supply capabilities positions it well for future growth. Investors will be keen to see how Eli Lilly navigates competitive pressures and continues to leverage its innovative pipeline to drive long-term value.
Explore the complete 8-K earnings release (here) from Eli Lilly and Co for further details.
