Eli Lilly And Co (NYSE:LLY) stock rose 3.48% (As on February 7, 11:37:32 AM UTC-4, Source: Google Finance) after the company reported strong demand for diabetes and weight-loss treatments to a better-than-expected finish in 2023, and the drugmaker expects momentum to carry into the new year. Lilly said that revenue could climb as much as 22% this year, as star sellers like the diabetes drug Mounjaro and its new weight-loss counterpart, Zepbound, gain market share. But the company is still struggling to make enough Mounjaro to satisfy high demand. Mounjaro sales jumped 65% to $2.21 billion in the fourth quarter compared with the third quarter. Doctors also prescribe that drug off-label for weight loss, which is one of the hottest areas of pharmaceutical sales. Zepbound, a new version of Mounjaro, registered about $176 million in sales during the final weeks of the fourth quarter after it became the latest drug approved for weight management in November. The data firm FactSet says analysts expect around $1.9 billion in sales from Zepbound this year. They see sales climbing to $12 billion in a few years.

Meanwhile, the demand has made it difficult to fill orders for Mounjaro and led to delays. The company expects that problem to persist while it adds manufacturing capacity. An expansion in North Carolina that the company started a few years ago is expected to begin production at the end of this year. With the supply of Mounjaro/Zepbound expected to increase by at least 50% in 2024, robust growth looks likely, since the market is already capacity-constrained. Outside cardiometabolic, Verzenio (up 42%) looks well-positioned based on a first-mover advantage within the CDK4/6 adjuvant breast cancer market. In the pipeline, Lilly is redeploying capital extremely well. Positive phase 2 NASH data with tirzepatide (an active ingredient in Mounjaro and Zepbound) increases the probability of success in the hard-to-treat disease. Also, expected 2024 phase 3 starts for olomorasib in lung cancer and lepodisiran in cardiovascular disease add to an already excellent late-stage pipeline.

LLY in the fourth quarter of FY 23 has reported the adjusted earnings per share of $2.49, beating the analysts’ estimates for the adjusted earnings per share of $2.30. The company had reported the adjusted revenue growth of 28 percent to $9.35 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $8.95 billion.

For the new year, Lilly predicts adjusted earnings of $12.20 to $12.70 per share, a range that falls mostly above the Wall Street consensus of $12.39 per share.