By Patrick Wingrove
Oct 29 (Reuters) - Eli Lilly raised its full-year revenue forecast and beat third-quarter earnings expectations on Thursday, propelled by surging demand for injectable weight-loss drugs that could allay investor concerns about price erosion in US government health plans.
The Indianapolis-based drugmaker now expects full-year revenue of $91 billion to $92 billion, underscoring its expanding lead in the multibillion-dollar GLP-1 market over Danish rival Novo Nordisk that has propelled
Lilly to a $1.2 trillion market valuation.
Lilly trimmed its adjusted profit outlook, however, to $35.00 to $36.00 per share, as $4.57 per share of acquired research charges from recent deals more than offset a $4.07 improvement in underlying profit guidance at the midpoint. The charges, taken in the third quarter, are primarily related to the acquisitions of AtaiBeckley and Curevo, Lilly said.
Lilly previously forecast revenue of $85.0 billion to $87.0 billion and earnings of $35.50 to $36.50 per share.
Lilly posted third-quarter revenue of $24.4 billion, topping analyst expectations of $22.61 billion, while adjusted profit of $7.48 per share beat estimates of $6.26, according to LSEG data.
Revenue included about $900 million of benefits, primarily $410 million of milestone payments tied to diabetes drug Jardiance, which Lilly said are the last it expects to receive, and favorable adjustments to rebate and discount estimates.
Third-quarter sales of diabetes drug Mounjaro reached $10.72 billion, topping Wall Street expectations of $10.16 billion, according to LSEG data, while its related obesity injection Zepbound brought in $5.35 billion versus estimates of $5.09 billion.
The robust sales will help ease market worries that severe price erosion from the $50-a-month price tag for Medicare recipients would outweigh explosive volume gains. Analysts at Bernstein said data showed that Lilly had captured about 70% of the 700,000 Medicare patients who recently initiated treatment with a GLP-1 medication.
While the new US pilot unlocked coverage for potentially millions who use the government's Medicare program for people aged 65 and over, the bulk of Lilly's non-reimbursed volume has historically moved through its $449-a-month cash-pay platform, raising stakes over how the discounts will impact long-term margins.
Lilly's newer obesity pill Foundayo brought in $184 million, compared with analyst estimates of $216.86 million.
Investors are closely tracking the Foundayo rollout as a key test of whether Lilly can blunt Novo Nordisk's first-mover edge with its oral Wegovy.
While initial US Foundayo prescriptions have trailed its Danish rival, some investors have downplayed the early lag, expecting the Lilly pill to emerge as a significant growth driver as it launches in more international markets.
Oral Wegovy led to about a 14% reduction in body weight over 64 weeks, and Foundayo about an 11% reduction over 72 weeks, in separate studies.
Foundayo was launched in the US and Britain earlier this year and could potentially begin selling in other European countries by year-end.
Lilly's realized prices fell 15% in the third quarter, offsetting part of a 53% rise in volume. US prices fell 7%, a decline Lilly attributed primarily to Zepbound and said was partly offset by adjustments to rebate and discount estimates. Outside the US, prices fell 29%, driven mainly by Mounjaro's inclusion on China's national reimbursement drug list.
Even as Lilly's obesity injections maintain commercial momentum, Wall Street's attention is shifting toward retatrutide, the company's next-generation weight-loss candidate slated for regulatory submission next year.
Retatrutide has been shown to drive average weight loss of 24% in midstage trials, topping results from drugs already on the market.
(Reporting by Patrick Wingrove in London. Editing by Bill Berkrot and Mark Potter)
