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Why Eli Lilly Stock Is Jumping Today

By Keith Speights – Dec 15, 2021 at 7:46AM

Key Points

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The big drugmaker had good news in its investor update.

What happened

Shares of Eli Lilly (LLY 1.05%) were jumping 8.3% as of 11:48 a.m. ET on Wednesday. The big gain came after the drugmaker provided an update for investors.

Lilly announced that it has initiated a rolling submission to the Food and Drug Administration for pirtobrutinib in treating mantle cell lymphoma. The company said that it's planning new phase 3 clinical studies evaluating tirzepatide in obesity outcomes, sleep apnea, and kidney disease. It also released new biomarker data showing positive efficacy for donanemab in treating Alzheimer's disease.

Investors were most excited, though, about Lilly's updated guidance. The company looks for full-year 2021 revenue to be between $28 billion and $28.3 billion, with adjusted earnings per share (EPS) between $8.15 and $8.20. Both ranges are well above consensus estimates.

Lilly also projects 2022 revenue will be between $27.8 billion and $28.3 billion with adjusted (EPS) between $8.50 and $8.65. This outlook is also higher than analysts' estimates.

Two scientists looking at a monitor.

Image source: Getty Images.

So what

An increase of more than 8% in one day is an impressive move for a big pharma stock. Lilly's gain seems to be warranted based on the company's investor update.

Chief financial officer Anat Ashkenazi said that key growth products should generate more than two-thirds of core revenue in 2022. Although Ashkenazi didn't list those key products, they include diabetes drugs Jardiance and Trulicity, autoimmune disease drugs Olumiant and Taltz, and cancer drugs Tyvyt and Verzenio.

The even better news is that Lilly's pipeline should fuel growth for years to come. Ashkenazi said that "anticipated upcoming launches will allow Lilly to deliver top-tier, volume-driven revenue growth through at least 2030."

Now what

Perhaps the biggest question mark for Lilly is how sales will hold up for its COVID-19 antibody therapies. However, the company should have plenty of growth drivers in its lineup even if COVID sales fall off significantly.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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