Eli Lilly And Co (NYSE:LLY) stock rose 1.91% (As on April 28, 11:29:40 AM UTC-4, Source: Google Finance) after the company raised its annual revenue and profit forecasts after topping first-quarter sales estimates on demand for its closely watched diabetes drug Mounjaro, ahead of a decision on its use as a treatment for obesity. The company separately said it planned to complete rolling submission to the U.S. Food and Drug Administration for use of the drug, commonly known as tirzepatide, in obesity patients in the coming weeks, following positive data from a second late-stage study. Data from the study showed that a high dose helped people with type 2 diabetes who were also obese or overweight to lose nearly 16% of their body weight. Lilly expects regulatory action for use of the drug in obesity as early as late 2023.

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 first quarter of FY 23 has reported the adjusted earnings per share of $1.62, missing the analysts’ estimates for the adjusted earnings per share of $1.73. The company had reported 11 percent decline in the adjusted revenue to $6.96 billion in the first quarter of FY 23, beating the analysts’ estimates for revenue of $6.86 billion. This is driven by a $1.47 billion decline in revenue from COVID-19 antibodies. Excluding COVID-19 antibodies, revenue in Q1 2023 increased 10%, driven by volume growth from Mounjaro, Trulicity, Verzenio and Jardiance. New Products contributed $573.6 million to revenue in Q1 2023, led by Mounjaro. Mounjaro clocked sales of $568.5 million for the quarter, compared with estimates of $422.5 million. Growth Products revenue increased 18% to $4.56 billion in Q1 2023, led by Verzenio, Trulicity, Jardiance and Taltz. On a non-GAAP basis, Q1 2023 gross margin decreased 8% to $5.46 billion. Gross margin as a percent of revenue was 78.4%, an increase of 2.3 percentage points. The increase in gross margin percent was primarily driven by sales of COVID-19 antibodies in Q1 2022, partially offset by lower realized prices.

Lilly now expects adjusted 2023 earnings of $8.65 to $8.85 per share, compared with its prior forecast of $8.35 to $8.55. Analysts were expecting an annual profit of $8.45 per share, according to Refinitiv estimates. The company also raised its annual revenue forecast to a range of $31.2 billion to $31.7 billion, compared with its prior range of $30.3 billion to $30.8 billion. Gross margin as a percent of revenue on a non-GAAP basis is expected to be at approximately 79%.