Thursday, April 14, 2022

Eli Lilly sales fall short thanks to antibody woes, but its non-COVID meds are fine

The pandemic giveth and the pandemic taketh away. 

That was the major takeaway from Eli Lilly’s first-quarter earnings, which reflected plummeting demand for COVID-19 drugs.  

While Lilly’s revenue for the period clocked in at $6.81 billion, a 16% increase from the period last year, it fell significantly short of analyst projections from Bloomberg ($7.02B) and Mizuho ($6.94 billion), for example. Earnings per share tumbled to $1.87, falling short of a predicted $2.13.

Investors weren’t happy. Shares plummeted by 8% in pre-market trading and were down by 4.7% midday. But at least one analyst figures the pandemic pain is masking a more positive long-term story.

“Quarterly performance (in 2021) was expected to be lumpy in Pharma due to the pandemic as well as sales of antibodies,” wrote Louise Chen of Cantor Fitzgerald. The firm puts Lilly’s 12-month price target at a hefty $245. 

As last year progressed, Lilly increasingly rode sales of bamlanivimab, making $871 million off the COVID-19 antibody treatment in the fourth quarter alone. But a month ago, as coronavirus variants emerged in the United States, the FDA halted distribution of bamlanivimab after finding it ineffective as a standalone treatment. Earlier in March, three western states, including California, had already halted its use.

RELATED: As variants take hold, FDA revokes authorization of Eli Lilly’s solo COVID-19 antibody

Bamlanivimab has shown some effectiveness against coronavirus variants in combination with Lilly’s etesevimab, but the combo is unlikely to make a comparable splash. 

Lilly’s sales of the two antibody drugs came to $810 million in the first quarter. New sales guidance includes an estimate of $1 billion to $1.5 billion of revenue from COVID-19 treatments this year.

Pandemic aside, Lilly performed well in the first quarter as sales of core products grew by 7% excluding the antibody revenue. 

Lilly’s diverse group of growth products continued to thrive. Type 2 diabetes med Trulicity generated $1.45 billion in sales, up 18% from last year, while another diabetes treatment, Jardiance, made $312 million for a 17% increase.

Breast cancer drug Verzenio made $269 million in sales, up 43%. Rheumatoid arthritis treatment Olumiant pulled in $193 million for a 39% bump. Migraine drug Emgality made $119 million, while Hodgkin’s treatment Tyvyt generated $110 million, for increases of 61% and 91%.        

On the pipeline side, Lilly’s excited about the potential of tirzepatide, a type 2 diabetes drug that has racked up the data to challenge Novo Nordisk’s Ozempic. And though the solo antibody has faltered, the bamlanivimab/etesevimab combo officially has its emergency use authorization.

RELATED: Watch out, Novo Nordisk. Lilly’s new dual-action diabetes med could pressure Ozempic: analyst

Lilly has other promising prospects in donanemab (Alzheimer’s), mirikizumab (ulcerative colitis) and Olumiant, which is approved to treat rheumatoid arthritis and is up for an approval in atopic dermatitis, albeit delayed.

Lilly’s performance in 2020 was strong enough that the company returned nearly $800 million to shareholders via increased dividends, “reflecting confidence in the ongoing strength of our business,” noted CEO Dave Ricks, during a conference call on Tuesday.

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