Shares of Eli Lilly hit a record high on Thursday as sales of weight-loss drugs Mounjuaro and Zepbound fueled a stronger-than-expected earnings report.
The company’s shares rose 6% after raising its full-year profit forecast, valuing it at $1.3 trillion.
Sales of Mounjaro and Zepbound both beat estimates by more than 5%, solidifying Eli Lilly’s lead in the booming obesity drug market.
Eli Lilly said more than 500,000 patients are using the shot through Medicare. Investors worried about potential profit losses as Eli Lilly’s price dropped to $50 a month, but Lilly’s annual forecast revenue still rose 1% to $92 billion.
The report highlights the company’s leading position in the multi-billion dollar GLP-1 market. According to Reuters, Eli Lilly’s rival Novo Nordisk (the maker of WeGovy) is valued at about $171 billion.
According to Reuters, Eli Lilly’s recent acquisitions of psychedelic drug maker Atai Beckley and clinical biotech vaccine company Cuervo have weakened its profit prospects. The company cut its expected profit share by 50 cents.
Greg Halter, research director at Carnegie Investment Advisors, said the increase in annual forecasts is enough to give investors confidence that the company is on the right path.
“They’re spending money so they can make money later,” said Halter, who owns more than 16,000 shares of Eli Lilly.
Investors are closely watching the company’s new oral weight-loss drug Foundayo to see if it can compete with Novo’s oral weight-loss drug Wegovy, which leads the prescription drug space. According to separate studies, patients with oral Wegovy lost approximately 14% of their body weight over 64 weeks, while patients with Foundayo lost approximately 11% of their body weight over 72 weeks.
Eli Lilly’s sales fell 15% last quarter compared with expectations.
But it expressed confidence that it would do better across the pond – Foundayo launched in the UK earlier this year and will be launched in other European countries by the end of this year.