What You Need to Know Ahead of Eli Lilly Q2 Earnings

Eli Lilly shares have risen by more than 38% since the start of the year, closing at $804.46 last Friday, but down from the record level of $996.1 seen earlier this month.

The drugmaker is projected to report $9.99 billion in revenue, a 20% bump from last year's mark of $8.31 billion, with earnings also projected to rise over 39% to $2.72 per share from $1.95 a year ago, according to concensus estimates.

In its first-quarter report, Eli Lilly lifted its revenue and profit projections for the full year due to strong sales for the weight-loss drugs.

"Lilly's first quarter performance reflects solid year-over-year revenue growth with strong sales of Mounjaro and Zepbound," Eli Lilly CEO David A. Ricks said. "Our progress in addressing some of the world's most significant health care challenges has resulted in increased demand for our medicines."

JPMorgan analysts wrote last Monday that Eli Lilly remains one of their "core holdings" in the pharmaceutical space, especially as the stock has fallen in recent weeks amid a market-wide rotation out of some of the largest stocks on the market.

Roche CEO Thomas Schinecker said that their first obesity drugs would come to market "significantly faster than people are expecting," potentially by 2028.

JPMorgan analysts said they believe Eli Lilly and Novo Nordisk are likely to "remain dominant" in the weight loss space going forward despite increased competition. They continue to see "significant upside" to Mounjaro and Zepbound sales.

Eli Lilly's Alzheimer's drug, donanemab, gained Food and Drug Administration approval on July 2. It will sell under the brand name Kisunla.

Kisunla is similar to another drug, Leqembi, approved last year. Both are intravenous infusions that attack a protein involved in Alzheimer’s, and both can slow the unfolding of dementia by several months. Both also carry similar safety risks. Leqembi, made by Eisai and Biogen, is given every two weeks; Kisunla is given monthly.

The list price for Kisunla will be $32,000 for a course of therapy lasting a year. Leqembi costs $26,000 per year, but is not stopped after amyloid is cleared. “Once you’ve removed the target that you’re going after, you then can stop dosing,” said Anne White, an executive vice president of Lilly and president of its neuroscience division. She said that this could reduce the overall cost and inconvenience of the treatment as well as the risk of side effects.

Additionally, Wolfe Research raised the firm's price target on Eli Lilly to $1,117 from $909 and keeps an Outperform rating on the shares ahead of the company's earnings report. Lilly, which also is on the firm's "Wolfe Alpha List" of top picks, feels like a "must own" stock given the big growth ahead because it has "not just one, but two major drivers, in two large primary care areas," specifically diabetes/obesity and Alzheimer's disease, the analyst tells investors in a preview note.

Source: Investopedia, Reuters, The fly