As the COVID-19 outbreak gained steam earlier this year, Eli Lilly reported a $250 million boost to revenues from customers stockpiling drugs. Now, though, customers are drawing on those stockpiles instead, and the pandemic hurt the company’s business elsewhere.
Aside from the $250 million stockpiling reversal, new patient starts slowed during the quarter, the company reports. That led to a $250 million revenue hit—and a total of a half a billion dollars in lost sales for the quarter.
Still, Lilly remains in a good position, Cantor Fitzgerald analyst Louise Chen wrote in a note to clients. Lilly’s new medicines made up 54% of sales during the second quarter, and the company is entering a “period of earnings growth” as it doesn’t have any major losses of exclusivity coming up. Lilly also has multiple “first-in-class" or “best-in-class compounds” in its pipeline, Chen wrote.
During the second quarter, Lilly's Type 2 diabetes med Trulicity, immunology drugs Taltz and Olumiant, and cancer fighter Verzenio all posted sales increases in the double-digit percentages or better, while Humalog and Forteo tumbled on competition.
One recent launch isn’t meeting expectations, though. Reyvow, the company’s acute migraine treatment that launched just before the pandemic, isn't mentioned in the company's second-quarter financials. Lilly Bio-Medicines head Patrik Jonsson said on a conference call the company is “not pleased” with the medicine's performance.
In response to the pandemic, the company pulled back on promotions, Jonsson said. It's now virtually detailing the product, but the drug is facing off against new migraine medicines from Allergan and Biohaven, so it remains to be seen how Reyvow can recover.
Overall in the second quarter, Lilly’s revenue declined by 2% from the same period last year to $5.5 billion. The company’s volumes grew by 6%, though, offset by a 7% decline in prices and a 1% hit from exchange rates.
RELATED: One COVID-19 opportunity for pharma? A chance to bolster its reputation, Lilly CEO says
For years, Lilly has been working to build a digital marketing platform to “reach customers where they want to be reached,” CEO David Ricks said on the call. The effort, which started before the pandemic, has “proven pretty useful" amid lockdowns, and Lilly has doubled down on those efforts.
The company would prefer to run a “hybrid” model where possible, incorporating a mix of in-person sales rep meetings and digital communications, he said. As for the effectiveness of digital versus in-person meetings, the CEO said the company isn’t sure yet. Digital's more efficient and scalable, though, he said.
On Thursday's call, Ricks also addressed President Donald Trump’s drug pricing executive orders, unveiled late last week. The orders, which he said the pharma industry would challenge, would “at best distract, at worst cripple” the same industry that’s fighting to deliver treatments and vaccines for COVID-19.