Things couldn’t be going much better for the drugmaker
which reports its second-quarter earnings before the market opens on Tuesday.
Shares are up around 50% over the past 12 months, including a 1% gain on Monday, and about 24% so far this year. The stock is among the few bright spots in the healthcare sector, which has significantly underperformed the broader market. Wall Street analysts expect Lilly to report sales of $7.6 billion and earnings of $1.98 a share for the second quarter, according to FactSet.
The enthusiasm is focused largely on Mounjaro, the treatment for Type 2 diabetes that has shown extraordinary promise as a weight-loss drug. The Food and Drug Administration is expected to approve Mounjaro to treat obesity this year. Analysts project that the treatment will be the best-selling medicine of all time.
Other Lilly obesity medicines now in clinical development, including one called retatrutide, look likely to improve on Mounjaro over the coming years. In a note in late July, Goldman Sachs analyst Chris Shibutani wrote that he expects $40 billion in combined, risk-adjusted, 2032 sales for Mounjaro, retatrutide, and a weight-loss pill in the Lilly pipeline called orfoglipron.
Beyond Mounjaro, there is donanemab, the Lilly (ticker: LLY) Alzheimer’s disease therapy that works similarly to Leqembi, the
(BIIB) Alzheimer’s drug that received full approval earlier this summer. The FDA rejected Lilly’s request for accelerated approval in January, but the company is expecting a decision on full approval by the end of the year.
The earnings announcement comes as investors wait for the outcome of a study by Novo Nordisk, a Lilly competitor, of how its weight-loss drug Wegovy affects rates of heart attack and stroke. Wegovy works similarly to Mounjaro, so the results will have significant implications for the Lilly drug, and whether insurers will be wiling to pay for it. The trial’s results could come any day.
Investors may also have questions on Tuesday about the expected launch of donanemab, which will come as Biogen continues to roll out Leqembi. While Medicare coverage of Leqembi appears to be less restrictive than feared, questions remain about how many people will take the drug, as well as its safety.
Lilly is hosting an investor call to discuss the earnings at 9 a.m. Eastern.
Write to Josh Nathan-Kazis at firstname.lastname@example.org