Lilly Q2 profit slumps 33% as older products lose steam

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Eli Lilly and Co. said profit slumped 33% in the second quarter, as sales of COVID-19 antibodies and several older products declined, pushing revenue down 4%.

The Indianapolis-based drugmaker on Thursday morning posted a profit of $1.13 billion, down from $1.68 billion a year ago, and cut its full-year profit guidance.

The results fell far short of Wall Street’s expectations. Lilly posted earnings per share of $1.25 after special charges, down 32%. Analysts were expecting $1.80 a share, according to the Zacks Consensus Estimate.

Shares of Lilly fell $10.67, or 3.4%, in premarket trading, to $303.16 each.

Sales declined for many older products, including diabetes drug Humalog (down 26%), cancer drug Alimta (down 63%), and osteoporosis drug Forteo (down 37%). Sales of COVID-19 antibodies fell 13%. Alimta lost its patent exclusivity in the U.S. during the spring.

But sales of many newer products appeared strong, including breast cancer drug Verzenio (up 72%), diabetes drug Trulicity (up 25%) and lung cancer drug Retevmo (up 75%).

The company said key growth products grew 20% and represented 67% of revenue in the quarter, excluding revenue from COVID-19 antibodies.

The company’s newest drug, diabetes medicine Mounjaro, which launched in the spring, pulled in sales of $16 million. Several analysts have said they expect the drug to become a near-instant blockbuster, with annual sales of more than $1 billion.

“We had an exciting quarter with the highly anticipated U.S. launch of Mounjaro, the first of potentially five new medicines we intend to launch by the end of 2023,” said David A. Ricks, Lilly’s CEO, in written remarks. “We are pleased with the underlying strength of our core business, and we expect our new medicines will add to our growth through the rest of the decade. We are entering a compelling era in our company’s history, as we continue our efforts to expand the number of people our medicines can help.”

For the full year, Lilly lowered profit guidance to a range of $7.90 to $8.05 a share, down from a range of $8.15 to $8.30 a share. Revenue guidance remained unchanged.

“While we expect that our financial results will continue to be negatively impacted by foreign exchange rates, our revenue guidance for 2022 remains unchanged,” chief financial officer Anat Ashkenazi said in written remarks.

Lilly also said that the U.S. Food and Drug Administration has given priority review designation to donanemab, the company’s experimental drug for Alzheimer’s disease, which gives it an accelerated approval pathway.

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