Eli Lilly Climbs as Mounjaro and Zepbound Drive a 39% Revenue Jump

Eli Lilly traded near $1,368 by early Thursday afternoon, up 6.2% from Wednesday’s close of $1,288.30, after a third-quarter report that beat on sales and came with a sharply higher revenue outlook. The quarter again ran on the company’s two incretin drugs. They carried the rest.

Mounjaro and Zepbound did the heavy lifting

For the quarter that ended September 30, Lilly reported revenue of $24.4 billion, up 39% from a year earlier. Mounjaro, the type 2 diabetes treatment, brought in $10.72 billion, a 65% gain. Zepbound, its weight-loss counterpart, added $5.35 billion worldwide, up 49%. Between them the two drugs accounted for two-thirds of the company’s sales.

Reported earnings came to $7.22 a share, up 16%. On a non-GAAP basis the figure was $7.48, up 7%. Both numbers absorbed a large charge: $4.57 a share tied to acquired in-process research and development, the accounting line that captures what a company pays for drug programs it buys before those programs earn their own revenue. The year-ago charge was just 71 cents. The quarter also included about $900 million of one-time benefits, led by $410 million in milestone payments on Jardiance, with no further milestones left to collect.

A bigger revenue target, a slightly lower profit range

Thursday’s move was made in the guidance. Lilly raised its full-year revenue forecast to a range of $91 billion to $92 billion, up from $85 billion to $87 billion, lifting the midpoint by $5.5 billion. That new floor sits well above where analysts had the company before the report.

The earnings outlook moved the other way, and the reason is worth reading closely. Lilly now guides to non-GAAP earnings of $35.00 to $36.00 a share, down from $35.50 to $36.50. The company said its underlying forecast actually rose by $4.07 at the midpoint. The $4.57 acquired-IPR&D charge taken in the quarter more than wiped that gain out on paper. Strip the one-time charge and the profit engine guided higher; the headline range still edged lower.

A step from its record high

Thursday’s gain extends a strong run. Shares closed Wednesday at $1,288.30 and have climbed about 15% over the past month. At Thursday’s intraday level near $1,368, the stock sits within 3% of its 52-week high of $1,408.38, reached earlier in October, and more than double its 52-week low of $623.78. Trading volume had already run above the stock’s recent daily average by mid-afternoon, with the session still open.

New approvals and a fourth-quarter trial start

Lilly used the quarter to widen its approved uses. The Food and Drug Administration cleared Mounjaro to reduce cardiovascular risk in adults with type 2 diabetes, approved Onswik, a once-weekly basal insulin, and expanded the label for the blood-cancer drug Jaypirca into previously untreated chronic lymphocytic leukemia.

More readouts are coming. Lilly reported positive topline results from a late-stage head-to-head study of its experimental drug retatrutide against a rival diabetes treatment, and said Phase 3 trials of EloraTZP, an obesity and diabetes candidate, would begin in the fourth quarter. The company’s next quarterly report is due in early February. Whether the incretin franchise can keep growing at this pace, without the one-time items that padded this quarter, is the question the next two reports will answer.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.