Eli Lilly FY numbers - GLP-1 sales soar

We first suggested that investors should buy the shares of weight-loss drug maker Eli Lilly in this video clip published two years ago, you can watch it here, on YouTube.

In that presentation, I made the argument that you should go for Eli Lilly, not its main competitor, Denmark-based Novo Nordisk. That was despite the fact that Novo's Ozempic was more widely available than Lilly's only weight loss product at the time, called Mounjaro. In general, we prefer US companies over European ones.

In recent weeks, Novo Nordisk has gone backwards, due to errors in production and permitting, despite having larger current sales. By contrast, Eli Lilly is marching ahead. They have ironed out supply chain problems, and handled their relations with the FDA very well.

On Wednesday night, Lilly published results for the second quarter that were very pleasing. Mounjaro (diabetes medication) sales came in at $3.09 billion, versus expectations of just $2.4 billion. Zepbound (weight-loss medication) sales totalled $1.24 billion in the second quarter, less than a year after it hit the market, while Wall Street was only expecting $819 million.

In developed markets there is strong demand for these drugs, and people are paying cash for them, not even waiting for medical aids to cover the cost. Eli Lilly also have a wide array of other drugs on sale, and new, improved products for weight loss in the pipeline, including orally-ingested orforglipron.

Eli Lilly is poised to generate an additional $7 billion in revenue in 2025. They have opened a second major Zepbound facility in North Carolina, and launched a Kwikpen (which holds 4 doses and is not subject to the same manufacturing bottlenecks as auto-injectors).

The Lilly share price is up 15.2% since the results. Over 5 years, it's up 683%. In the same time Novo is up "only" 430%.

We are very happy with our stock-picking process on this one. Eli Lilly is still a strong buy.