Eli Lilly slashed its 2022 outlook Tuesday despite a third-quarter beat that included bullish sales of its newest diabetes drug, Mounjaro, and LLY stock toppled.
For the year, Lilly now expects to earn $7.70-$7.85 per share, minus some items, on $28.5 billion to $29 billion in sales. The company cut 20 cents off its earnings outlook and $30 million off its sales guidance, citing challenges in exchange rates and tax law.
SVB Securities analyst David Risinger says Lilly's third-quarter results benefited from sales of Covid treatments. Excluding those, sales missed forecasts, he said. And Covid treatment sales are struggling as new variants elude the older drugs. Still, he has a bullish view on LLY stock.
On today's stock market, LLY stock sank 2.6% to 352.58. Shares recently broke out of a flat base with a buy point at 335.43, according to MarketSmith.com.
LLY Stock: Mounjaro Hits Impressive Streak
Overall, third-quarter sales inched up 2% to $6.94 billion and beat forecasts for $6.89 billion. On an adjusted basis, earnings came out to $1.98 per share. Earnings jumped 12% and were ahead of estimates from analysts polled by FactSet for $1.91 a share.
Mounjaro, the new diabetes medicine and experimental obesity treatment, generated $187.3 million in sales. That included $97.3 million in U.S. sales. The balance came from Japan, where Lilly inked a deal with Mitsubishi Tanabe Pharma to sell and distribute Mounjaro.
Sales were more than double LLY stock analysts' projection for $82 million, SVB Securities' Risinger said in a report.
"We still see upside to our Mounjaro 2023 estimated sales of $1.6 billion and longer-term projections," he said. He has an outperform rating on Lilly shares.
Other Sales Mixed For Lilly
Other key franchises were mixed. Lilly's biggest medicine, diabetes treatment Trulicity, notched $1.85 billion in sales, increasing 16%. Cancer drug Verzenio generated $617.7 million in sales, climbing 84%. Sales of diabetes med Jardiance brought in $573.3 million, up 47%.
But sales of diabetes medicine Humalog and cancer drug Alimta plummeted a respective 29% and 74%.
Lee Brown, who follows LLY stock as the global sector lead for health care at research firm Third Bridge, says Humalog declined amid pricing challenges in the U.S. Alimta, meanwhile, is experiencing generic competition.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
