Eli Lilly And Co (NYSE:LLY) stock surges 17.55% (As on August 8, 11:33:12 AM UTC-4, Source: Google Finance) after the company raised its annual forecasts after beating estimates for quarterly profit, driven by strong demand for its new diabetes drug Mounjaro, ahead of a decision on its use as a weight-loss treatment. The company is leaning on Mounjaro, approved last May in the U.S. for diabetes, to soften the hit from insulin price cuts and competition for cancer therapy Alimta. Meanwhile, data from a large trial showed that a high dose of Mounjaro, or tirzepatide, helped people with type 2 diabetes who were also obese or overweight to lose nearly 16% of their body weight. An approval for Mounjaro to treat obesity could unlock a multi-billion dollar market for the drugmaker. Mounjaro, which is being used off-label as an obesity treatment, generated quarterly sales of $979.7 million, compared with estimates of $743 million.
Eli Lilly & Co. signage is displayed outside the company’s office in La Jolla, California, U.S., on Tuesday, Aug. 23, 2011. Eli Lilly has developed productive alliances and partnerships that advance the capacity to develop innovative medicines at lower cost. Photographer: Konrad Fiedler/Bloomberg via Getty Images
LLY in the second quarter of FY 23 has reported the adjusted earnings per share of $2.11, beating the analysts’ estimates for the adjusted earnings per share of $1.98. The company had reported the adjusted revenue growth of 28 percent to $8.3 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $7.58 billion. It also included a US$579 million boost from the sale of rights for nasal hypoglycemia treatment Baqsimi.
The company now expects adjusted 2023 earnings of $9.70 to $9.90 per share, compared with its prior forecast of $8.65 to $8.85. Lilly has said it expects a regulatory decision on the Mounjaro drug’s use in obesity patients late this year.
Eli Lilly now expects annual revenue in range of $33.4 billion to $33.9 billion, compared with its prior range of $31.2 billion to $31.7 billion.
On the other hand, LLY and Versanis Bio today announced a definitive agreement for Lilly to acquire Versanis, a private clinical-stage biopharmaceutical company focused on the development of new medicines for the treatment of cardiometabolic diseases. Under the terms of the agreement, Versanis shareholders could receive up to $1.925 billion in cash, inclusive of an upfront payment and subsequent payments upon achievement of certain development and sales milestones. The transaction is subject to customary closing conditions. Lilly will determine the accounting treatment of this transaction as a business combination or an asset acquisition, including any related acquired in-process research and development charges, according to Generally Accepted Accounting Principles (GAAP) upon closing.