Eli Lilly (LLY) experienced a “bump in the road” for its latest diabetes treatment, Mounjaro, an analyst said Thursday as LLY’s shares tumbled.
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Mounjaro’s revenue came in at $279.2 million, beating expectations for $288 million to $370 million, according to several analyst calls. Lilly’s slides indicate that Mounjaro is now covered for about 50% of commercial insurance and Medicare Part D recipients, compared to just 45% in the third quarter, SVB Securities analyst David Risinger said in a note to clients.
Furthermore, sales of Lilly’s largest diabetes drug, Trulicity, also came in below forecasts at $1.94 billion, but rose 3%. Analysts had expected $2.07 billion to nearly $2.1 billion, Risinger said.
But Edward Jones analyst John Boylan says the LLY stock plunge is an overreaction. He notes that Lilly is also testing Mounjaro as a treatment for obesity, sleep apnea and other diabetes-related illnesses. In today’s stock market, Lilly’s stock fell 3.5% to close at 330.70.
“Demand for Trulicity remains strong and Lilly has struggled to keep up with orders,” he said in a note. “We suspect the same is true for Mounjaro. As production capacity for these important products increases, this problem is likely to disappear.”
He added: “This quarter’s results can be seen as a bump in the road.”
LLY Stock: Covid Antibodies Weigh Sales
Total revenue in the fourth quarter was down 9% to $7.3 billion as Lilly’s Covid antibody revenues took a huge hit. Excluding their impact, sales were actually up 5%, Lilly said in a press release. According to FactSet, revenue was a hair short of expectations at $7.33 billion.
Adjusted earnings fell 4% to $2.09 per share, but easily beat forecasts of between $1.78 and $1.87. SVB’s Risinger noted that Lilly experienced a much lower-than-expected tax rate, which helped boost adjusted earnings by 15 cents per share.
Breast cancer drug Verzenio showed the best growth, doubling year over year to $808 million. That handily beat projections of $706 million to $725 million, he said. On the other hand, Lilly’s Covid antibody revenue was down 96% to $38 million. While stock analysts expected a plunge from LLY, it was much steeper than $102 million to $200 million in revenue.
Lilly raised its earnings guidance for the year to $8.35-$8.55 per share, minus some items. Analysts were expecting $8.35 per share. The company maintained its sales guidance of $30.3 billion to $30.8 billion, in line with LLY stock analysts’ forecast of $30.47 billion.
According to MarketSmith.com, LLY stock recently slid below the low end of a flat base with a buy point of 375.35.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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