Eli Lilly's third-quarter results showed a year-over-year increase, yet failed to meet Wall Street expectations as the drugmaker revised its full-year earnings outlook downward due to acquisition-related charges. The company reported adjusted earnings of $1.18 per share for the September quarter, a significant rise from $0.10 year-over-year, though it fell short of the Capital IQ-polled consensus, which estimated earnings at $1.47.
Revenue saw a year-over-year rise of 20%, reaching $11.44 billion, but this also missed street projections that were set at $12.12 billion. Consequently, the stock saw a decrease of about 11% during premarket trading. Eli Lilly noted that it faced acquired in-process research and development charges of $2.83 billion this quarter, primarily related to the $3.2 billion acquisition of biopharmaceutical company Morphic, which was completed in August.
Research and development expenses increased by 13% compared to the previous year, with marketing, selling, and administrative costs going up by 16% in Q3. "Lilly had another strong growth quarter, with total revenue increasing by 42% after excluding divestiture activity in the same period last year," stated Chief Executive David Ricks.
"While the growth of Mounjaro and Zepbound is impressive, we are equally proud of the 17% growth in non-incretin revenue, which includes our oncology, immunology, and neuroscience portfolios." Sales in the US surged by 46%, totaling $7.81 billion, bolstered by volume gains of 35% and price increases of 11%.
Conversely, revenue from non-US markets dropped by 12%, totaling $3.63 billion, primarily due to a 10% fall in volume. Revenue from Eli Lilly's diabetes treatment Mounjaro skyrocketed to $3.11 billion from $1.41 billion in the same quarter last year, while the weight-loss medication Zepbound accounted for $1.26 billion in revenue.
The sales of breast cancer treatment Verzenio increased by 32%, though sales of the type 2 diabetes drug Trulicity experienced a decline of 22%. Looking ahead to 2024, Eli Lilly anticipates adjusted EPS figures between $13.02 and $13.52, revising down from earlier projections of $16.10 to $16.60. This adjustment is mainly attributed to the acquired in-process research and development charges from Q3.
Analysts expect normalized EPS of $13.45. Projected revenue for the ongoing year stands between $45.4 billion and $46 billion, marking a reduction from the previous upper estimate of $46.6 billion. Presently, analysts estimate the company will generate $46.22 billion in revenue. Stock Price: 808.47, Change: -95.11, Percent Change: -10.53.