What to Expect From Weight Loss Drug Stocks' Upcoming Earnings Reports
Both $Eli Lilly and Co (LLY.US)$ stock and $Novo-Nordisk A/S (NVO.US)$ stock dipped below their 50-day line in late October — a bearish sign — as investors await a Food and Drug Administration decision on LLY's potential weight-loss drug and focus on NVO's Supply of Wegovy.
Lilly's diabetes drug Mounjaro, a GLP-1 agonist, is expected to be approved for weight loss before the end of the year. Novo Nordisk currently leads the pack with its GLP-1 agonist, semaglutide, which is sold as a weight-loss drug called Wegovy and in diabetes treatment as Ozempic and Rybelsus. Novo is testing a once-weekly shot of semaglutide to reduce the risk of death due to kidney or cardiovascular disease and has reported promising results so far. Patients taking Wegovy for five years also had a 20% reduced risk of heart attack, stroke, or other cardiovascular conditions. Lilly is working on a next-generation diabetes and weight-loss drug called retatrutide as well.
Key Expections to Watch From LLY's Earnings:
Lilly's adjusted earnings for the second quarter rose almost 69% to $2.11 per share, exceeding analysts' predictions of $1.98 per share. Sales also grew by 28% to $8.31 billion, surpassing the projected $7.58 billion. The growth was attributed to Mounjaro, Verzenio, Jardiance, and Taltz. All four drugs generated more revenue than expected, with Mounjaro sales exceeding expectations by over $200 million.
For the third quarter, analysts are predicting a change in growth trajectory with an decreased EPS despite a projected revenue increase to $8.99 billion, up by 29%. This contrasts with last year's earnings gain of $1.98 per share. The company has attributed this change to a research and development charge that is expected to have a significant impact of $3.30 per share on earnings.
Analysts also expect Alzheimer's drug donanemab to bring in $11 million this year before increasing to $692 million in 2024 and reaching blockbuster status with $1.2 billion the following year.
It will be key to watch how the markets for weight-loss drugs and Alzheimer's treatments unfold.
Key Expections to Watch From NVO's Earnings:
When Novo Nordisk publishes third-quarter results this week investors and analysts are hoping the company will clarify when limits on the supply of starter doses of its weight-loss drug Wegovy in the United States will cease.
Supply of Wegovy is the most important thing for specialist healthcare investors covering Novo right now," said Barclays analyst Emily Field.
Earlier this month, Novo raised its outlook for sales and operating profit for the full year for a third time this year, reflecting strong demand for Wegovy and its diabetes medication Ozempic, which contains the active ingredient semaglutide.
Source: Seeking Alpha, Proactive, Investor's Business Daily, REUTERS
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