Eli Lilly: The “Wealth Builder” Storyline Remains in Place

The intel from today's earnings report ...

In this issue of Investing Daily Dose (IDD):

✅A Good Day for Eli Lilly Shareholders✅

The “Year of Weight-Loss Drug Stocks” is in full swing for 2024 after Eli Lilly & Co. LLY 0.00%↑ reported first-quarter earnings, with a few highlights worth sharing:

The Quick Recap

1. Earnings per share (EPS) of $2.58 beat expectations of $2.48.

2. Revenue of $8.77 billion fell short of the $8.94 billion forecasted by analysts. But there’s a quirk at play here: The revenue shortfall was due to the supply of one of its weight-loss drugs not keeping up with demand – more on that in just a minute.

3. Gross margin improved to 80.9% - up from 76.6% at the same time last year.

4. Eli Lilly boosted its full-year guidance – from a previous $41.44 billion to a range between $42.4 billion to $43.6 billion.

Boosting “guidance” is bullish – and was due to surging demand for its weight-loss drug Zepbound, as well as its off-label weight-loss drug Mounjaro.

Zepbound – which just won Food and Drug Administration approval in December – racked up sales of $517.4 million, thrashing estimates of $418.2 million.

Mounjaro’s sales of $1.81 billion fell short of expectations of $2.08 billion, but that was largely due to supply not keeping up with demand – and Eli Lilly is working on solutions to meet that demand.

The company will have a North Carolina facility producing Zepbound and Mounjaro up and running by the end of the year. It just broke ground on a manufacturing site in Germany. And it plans to acquire Nexus Pharmaceuticals to produce injectable medicines.

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Bill’s Investing Takeaway

“Blockbuster drugs are the ‘Holy Grail’ for biotech firms and biotech investors alike.

And, for investors, getting in at the very start of a new ‘Blockbuster’ is a true ‘Wealth Building’ move.

That’s us … we’re Wealth Builders.

And we’re playing the long game here.

We see the opportunity … we see the upside … and it’s huge.”

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