Thanks to impressive sales growth across multiple therapeutic areas in 2024, Eli Lilly seems to have assuaged investor concerns that its incretin drugs for diabetes and obesity were reaching a sales plateau.
Lilly on Thursday reported fourth-quarter revenue of $13.53 billion, a steep 45% increase over the sum the Indianapolis-based drugmaker generated during the same period in 2023.
Lilly didn’t mince words about what sparked that growth, pointing to an impressive 60% sales leap for its type 2 diabetes blockbuster Mounjaro, which brought home $3.5 billion over the last three months of the year.
The med's obesity counterpart, Zepbound, reeled in $1.9 billion during the quarter. The figure was roughly an eleven-fold jump from its fourth-quarter haul of $175 million in 2023, shortly after its launch.
Lilly’s share price was up more than 2% in Thursday morning trading, with analysts at Citi writing to clients that Mounjaro and Zepbound’s performance likely “dispelled suspense” among industry watchers and investors. Last year, the drugs sparked investor concern when they failed to meet Wall Street expectations in the third quarter, suggesting that the larger GLP-1 market might have been starting to top out.
For the full year, Lilly grew sales 32% over 2023 to roughly $45 billion, in line with updated guidance that the company provided last month during the J.P. Morgan Healthcare Conference in San Francisco.
At the time, the drugmaker’s decision to shave $400 million off the low end of its 2024 sales expectations startled investors, sending Lilly’s stock down about 6.5% on the day of the announcement.
Lilly’s CEO, David Ricks, credited the move to an overestimation of the pace of growth for Mounjaro and Zepbound.
"While the U.S. incretin market grew 45% compared to the same quarter last year, our previous guidance had anticipated even faster acceleration of growth for the quarter,” the CEO noted at the time.
He went on to point to the uncertain dynamics of the burgeoning metabolic medicines market in general.
"The scale of this business and the way it's been growing, the consumer part of it, along with the stocking dynamics, it's just been a learning [experience] for us," Ricks said. "Our forecasters really nailed the rest of the portfolio. We don't have a problem with forecasting. It's just—this market is quite different."
The question of just how to reckon with the scope of the obesity market cropped up during Lilly’s earnings call Thursday, with at least one analyst wondering aloud whether the company has been properly juggling supply and demand via marketing campaigns, manufacturing expansions and launches outside the U.S.
“I think the perspective we have is that it’s early days on a very, very large opportunity,” Ricks responded. The CEO acknowledged the “turbulence” that’s defined the field of late, admitting that Lilly “fell short” of meeting its own expectations toward the end of 2024.
As for whether Lilly is reaching the “edge of the demand curve” for obesity, “we don’t think we’re close to it right now,” he said.
Non-incretin pharma performance
Although Mounjaro and Zepbound have been headlining Lilly’s financial reports in recent years, the company’s roster of non-incretin products, which grew sales 20% in the fourth quarter, should “help anchor top-line growth,” the Citi analysts wrote in their note.
In particular, Lilly highlighted the momentum behind breast cancer med Verzenio and the SGLT2 inhibitor Jardiance, which generated roughly $1.6 billion and $1.2 billion in 2024’s fourth quarter, respectively.
For the year ahead, Lilly is sticking to the 2025 revenue guidance it unveiled last month, which covers a range of $58 billion to $61 billion. Speaking at JPM last month, Ricks said he expects the company to grow revenues thanks in part to a suite of new drugs like the cancer med Jaypirca, atopic dermatitis treatment Ebglyss, ulcerative colitis drug Omvoh and the Alzheimer’s disease therapy Kisunla.
"If you stripped away incretins and GLP-1s from the pharma sector, the balance of Lilly would probably be the fastest-growing big company in the sector,” Ricks noted at the time.
On the topic of manufacturing, Lilly has spent the past few years laying out billions of dollars to grow production capacity for Mounjaro and Zepbound. Despite the formal conclusion of Lilly’s tirzepatide shortage in the U.S. last year, the company says it will continue to channel cash back into its production network in 2025.
Overall, Lilly expects it will be able to crank out 1.6 times the amount of marketable incretin doses in the first half of the year versus the first half of 2024, according to the company’s earnings release.
“I have zero doubt that we still have more building to do, and that the capacity we put in the ground so far is not sufficient to meet global demand,” Ricks noted on Thursday's call.
Editor's note: This story has been updated with executive comments from Eli Lilly's fourth-quarter and full-year 2024 earnings call.