Eli Lilly Reports Strong Q1 Earnings Amidst Weight Loss Drug Surge
Eli Lilly recently announced its first-quarter financial results, showcasing remarkable revenue and earnings that exceeded analysts’ expectations. This surge in performance is largely attributed to the increasing demand for its diabetes and weight loss medications.
The pharmaceutical leader revised its projections for the full fiscal year 2025. The new forecast estimates adjusted earnings per share to be between $20.78 and $22.28, down from an initial prediction of $22.50 to $24. The primary reason for this adjustment is a substantial charge of $1.57 billion linked to the acquisition of a novel oral cancer treatment from Scorpion Therapeutics.
Despite the revised earnings outlook, Eli Lilly maintained its sales forecast for fiscal 2025, estimating figures between $58 billion and $61 billion. The company’s guidance takes into account the existing tariffs implemented during the Trump administration as of May 1, but notably excludes the anticipated future tariffs on imported pharmaceuticals.
In a recent CNBC interview, Eli Lilly CEO Dave Ricks emphasized that the pharmaceutical industry, including Eli Lilly, is already committing to investments in U.S. manufacturing, which aligns with one of the goals of the current tariff policies. He stated, "I think that actually the threat of tariffs is already bringing back critical supply chains into important industries, like pharmaceuticals and chips."
Ricks also expressed a desire to see reduced tax rates for domestic production, specifically a rate of 15%. He pointed out that the existing tax framework encourages many drug manufacturers to produce in regions with lower tax rates, such as Ireland and Singapore. He believes attractive tax incentives could bring production back to the U.S.
Among Eli Lilly’s top-selling products, its diabetes drug Mounjaro excelled, generating an impressive $3.84 billion in revenue for the quarter—a staggering 113% increase compared to the previous year. Additionally, the weight loss medication Zepbound reported $2.31 billion in sales, significantly outpacing last year’s figure of $517.4 million when it first entered the U.S. market. Analysts had projected Mounjaro to bring in $3.81 billion and Zepbound $2.28 billion, demonstrating that both products are performing exceptionally well.
However, Eli Lilly’s stock experienced a slight decline of 5% in premarket trading following the earnings report.
For the first quarter, Eli Lilly reported earnings per share of $3.34, above the anticipated $3.02. The company’s revenue reached $12.73 billion, surpassing projections of $12.67 billion, marking a 45% increase year-over-year.
Sales within the U.S. soared by 49%, amounting to $8.49 billion, primarily driven by a 57% increase in volume for its flagship products, Mounjaro and Zepbound. This growth, however, was partially offset by reduced prices for these drugs.
Eli Lilly recorded a net income of $2.76 billion, or $3.06 per share, up from $2.24 billion, or $2.48 per share, in the same quarter last year. Adjusted earnings, excluding extraordinary items, came to $3.34 per share.
The demand for Zepbound and Mounjaro has significantly outstripped supply over the past year, prompting both Eli Lilly and its competitor, Novo Nordisk, to invest billions in increasing their manufacturing capacity. These efforts have shown progress; the FDA confirmed in December that the U.S. shortage of tirzepatide—the active ingredient in both Zepbound and Mounjaro—was resolved. This decision effectively prevents many compounding pharmacies from marketing cheaper, unapproved versions of tirzepatide.
This story is ongoing, and updates will be provided as more information becomes available.
