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Eli Lilly and Co. announced Thursday a third-quarter loss of $57.4 million, or 6 cents a share, on higher revenue, due mostly to higher research and development costs associated with acquisitions.
Excluding nonrecurring items, the Indianapolis-based drugmaker posted adjusted earnings of 10 cents a share, beating Zacks consensus estimate of a loss of 11 cents a share.
Revenue climbed 37% to $9.5 billion in the quarter, driven by growth from diabetes drugs Mounjaro and Jardiance and cancer drug Verzenio, as well as $1.42 billion from the sale of rights for the antipsychotic drug Zyprexa. Excluding revenue from the Zyprexa sale and COVID-19 antibodies, revenue increased 24%.
Lilly cut its full-year adjusted earnings guidance to the range to $6.50 to $6.70 a share, from $9.70 to $9.90.
“Lilly executed on business development priorities in the third quarter, including multiple acquisitions that expand our already robust pipeline,” CEO David Ricks said in written remarks. “We remain focused on growth and delivering new, innovative medicines that make life better for millions of patients around the globe.”
In the quarter, Lilly recognized so-called “acquired in-process research and development” costs of $2.98 billion, primarily related to the acquisitions of DICE Therapeutics, Inc., Versanis Bio, Inc. and Emergence Therapeutics AG.
Shares of Lilly dropped $4.40, or 0.8% in premarket trading, to $550. But shortly afterward, they rebounded to about $585 in midmorning trading, up $31 or about 5.6.%
Lilly’s hottest new product, diabetes drug Mounjaro, rang up sales of $1.4 billion in the quarter. For the first nine months of the year, Mounjaro sold $2.96 billion.
The drug, which has shown promise as a weight-loss drug, launched in June 2022. Federal regulators are expected to approve it to treat obesity this year.
Research and development expenses in the third quarter increased 34% to $2.41 billion, or 25% of revenue, primarily driven by higher development expenses for late-stage assets and additional investments in early-stage research.
Marketing, selling and administrative expenses increased 12% to $1.8 billion primarily driven by costs associated with launches of new products and indications, as well as compensation and benefits costs.
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Wow the earnings weren’t what was expected…..