Eli Lilly has turned its numbers around and become the world’s most valuable pharma company, thanks to its type 2 diabetes and off-label use obesity drug tirzeptide, which generated no less than USD 1.4 billion in its first full quarter on the market. As the US firm prepares to launch the drug for obesity while it awaits a significant Alzheimer’s FDA approval and struggles with supply issues, it may be on its way to becoming the first trillion-dollar life sciences company.
It is not enough just to have good drugs. Let’s have some great ones that change medical history forever
Daniel Skovronsky, chief scientific and medical officer
An Overnight Blockbuster
Eli Lilly has done an about face revenue-wise and proved that its bet on diabetes and obesity has paid off. After a decrease in the sales of its COVID-19 antibodies brought a revenue downturn in the first quarter of the year, the company has bounced back thanks to its overnight blockbuster, type 2 diabetes drug, Mounjaro (tirzeptide), a GLP-1/GIP agonist, or synthetic peptide with glucose-lowering effects, that is awaiting approval for obesity.
The company saw a 38 percent revenue gain in Q3, the largest in the industry, driven by USD 1.4 billion in sales of Mounjaro during its first full quarter on the market with a large part of the sales coming from the US where Mounjaro is already being used off-label for weight loss. In addition, its breast cancer drug Verzenio saw an outstanding increase in sales of 68 percent to USD 1 billion in Q3 while Jardiance, the firm’s diabetes treatment also being used for heart failure and kidney disease, reported USD 701 million in sales, a 22 percent year over year rise.
“Lilly had another strong quarter in Q3 as Mounjaro and Verzenio continued to gain momentum,” said Lilly CEO David A. Ricks. “Lilly executed on business development priorities in the third quarter, including multiple acquisitions that expand our already robust pipeline. We remain focused on growth and delivering new, innovative medicines.”
In response to its positive third quarter results, Eli Lilly shares went up an additional 5 percent after they had already jumped by as much as 75 percent throughout the year, making Eli Lilly the most valuable life sciences company in the world.
Alzheimer’s Momentum
To sustain its growth and become what chief scientific and medical officer Daniel Skovronsky said would be the world’s first trillion-dollar life sciences company, Lilly is planning to launch more than 20 new drugs over the next decade. “It is not enough just to have good drugs. Let’s have some great ones that change medical history forever,” said Skovronsky.
After its significant advances in diabetes and obesity, one of the areas where the pharma company has made a major breakthrough is in the Alzheimer’s space. The firm’s experimental drug donanemab showed positive results in a phase III study, slowing cognitive and functional decline by as much as one year. The drug, whose FDA approval is expected in the first quarter of 2024, also looks to be another game changing hit for Lilly that will push further revenue growth going forward.
Meanwhile, the firm’s pipeline is also showing considerable progress on other fronts. Lilly’s ulcerative colitis drug, mirikizumab-mrkz, has recently received a nod from the FDA and the company continues to pursue it diabetes and weight-loss R&D with a next-generation drug called retatrutide.
Beefing up Production
Lilly has also “suffered” from its success. With Mounjaro flying off the shelves, the firm has had trouble meeting the demand, claiming that sales would have been even higher if the company had not suffered delays in filling orders. Further pressure is expected once tirzeptide is marketed for obesity, seeing as Novo Nordisk competitor Wegovy is also in short supply and that Lilly’s option has demonstrated better weight reduction results, cutting body weight by 16 percent on average over 17 months.
The pharma firm has made some big investments in strengthening its production capacity, having invested USD 450 million in its Research Triangle Park facility in North Carolina and USD 1.6 billion in new manufacturing sites in its native Indiana. In addition to this added capacity, Lilly CEO David Ricks said that the company was “aggressively planning” further manufacturing expansion.
“It’s my top priority, is expanding the capacity of our ability to make not just Mounjaro but other drugs like it in our pipeline to meet the challenge here,” Ricks said. “People are frustrated when they can’t get their medicine. We understand that, and we’re going to fix that problem.” “We’re also continuing to focus on other parts of the supply chain, as demand is expected to remain high and production bottlenecks may shift over time,” said Lilly’s CFO, Anat Ashkenazi, on an investor call.
