What happened
Shares of Eli Lilly (LLY -2.77%) were trading 2% higher as of 11:50 a.m. ET Thursday after having jumped by as much as 5.9% earlier in the day. The big drugmaker announced its first-quarter results before the market opened.
Lilly's Q1 numbers, however, weren't all that great. The company generated revenue of $6.96 billion, down 11% year over year.
Its bottom line also deteriorated. Lilly reported first-quarter net income of $1.34 billion, or $1.49 per share, compared with earnings of $1.9 billion, or $2.10 per share, in the prior-year period, based on generally accepted accounting principles (GAAP). Non-GAAP adjusted earnings for the recent quarter came in at $1.46 billion, or $1.62 per share. That result was below analysts' consensus adjusted earnings estimate of $1.73 per share.
So given those relatively lackluster results, why did the pharma stock move higher? For one thing, Lilly increased its 2023 revenue guidance by $900 million to a range of $31.2 billion to $31.7 billion. The company also boosted its earnings outlook. Lilly projects non-GAAP earnings per share of between $8.65 and $8.85. It previously forecast non-GAAP earnings per share in the range of $8.35 to $8.55.
However, the bigger story for Lilly was that the company also announced great results from a late-stage study of tirzepatide. On the higher of the two dosages being studied, patients with obesity or who were overweight and had type 2 diabetes achieved average weight loss of 15.7% at 72 weeks of treatment.
So what
Lilly's 2023 guidance revisions weren't quite as impressive as they might seem at first glance. Management said that $650 million of the additional $900 million in revenue growth it now predicts was the result of updates to its foreign-exchange rate assumptions.
However, Lilly's tirzepatide news lived up to the hype. Not only did the drug's efficacy look good, but so did its safety profile.
Now what
Lilly now plans to wrap up its package to submit tirzepatide to U.S. regulators for approval as a weight-loss treatment for adults within the next few weeks. The company anticipates potential U.S. approval as soon as late 2023.
