By Bhanvi Satija and Patrick Wingrove
(Reuters) -Eli Lilly forecast annual profit largely above Wall Street estimates on Thursday, a move investors said eases some concerns about signs of weakness in sales of its popular diabetes and weight-loss treatments.
The U.S. drugmaker expects to earn between $22.50 and $24.00 per share on an adjusted basis this year. Analysts were expecting a profit of $22.86 per share, according to data compiled by LSEG.
Lilly reported sales for its weight-loss drug Zepbound and diabetes treatment Mounjaro of $1.91 billion and $3.53 billion respectively, in line with its forecast from last month that fell below analysts’ expectations.
Analysts as of Thursday were expecting $2.03 billion for Zepbound and $4.27 billion for Mounjaro, according to LSEG data. Lilly has previously attributed the miss to issues in the supply chain.
The U.S. drugmaker’s shares were up 2% at $857.67 in early trading. The stock has more than doubled in value in the last two years, making it the most valuable healthcare company in the world, but has been subdued since October when Lilly reported disappointing sales for its highly in-demand treatments.
The results “put things back on track for Lilly after a rocky period,” said Yuri Khodjamirian, chief investment officer at ETF-operator Tema ETF. Tema’s Cardiovascular & Metabolic ETF tracks Lilly and rival Novo Nordisk’s.
“It’s quite clear that the company is hopefully back on track in terms of its growth and outlook,” he said.
Lilly’s Zepbound and Novo’s Wegovy dominate a market for weight-loss treatments that analysts estimate could be a $150 billion market by the early 2030s. Both the drugmakers have seen rapid growth in recent years, fueled by investor interest in these drugs.
Novo on Wednesday forecast slower growth this year compared to 2024, and said it saw “intact strong demand for obesity treatments” in the United States and elsewhere.
Investors are keen to hear Lilly’s plans for international growth and how it can effectively learn from the lessons of 2024, to plan ahead for this year, BMO Capital Markets Evan Seigerman said.
Lilly last month forecast total sales to be between $58 billion and $61 billion in 2025, banking on the launch of Mounjaro in new markets, including China, India, Brazil and Mexico, for both diabetes and obesity. Analysts on average estimate revenues of $59.21 billion for 2025, according to LSEG data.
The company said it expects U.S. growth of its diabetes and weight-loss drugs to be consistent with 2024.
Lilly and Novo have spent billions to ramp up manufacturing of their treatments as well as in research and development.
“They need to be spending this money to deliver growth,” Khodjamirian said.
(Reporting by Bhanvi Satija and Mariam Sunny in Bengaluru and Patrick Wingrove in New York; Editing by Sriraj Kalluvila and Mark Porter)
