🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

LLY and Novo Report Strong Earnings but Are Vulnerable to Q4 Headwinds

Published 03/11/2023, 06:38 am
Eli Lilly and Novo Nordisk continue to capitalize on unprecedented interest in weight-loss drugs, with both companies posting strong Q3 results on Thursday.

Pharmaceutical giants Eli Lilly (NYSE: $LLY) and Novo Nordisk (CSE:NOVOb) reported solid Q3 earnings results, driven by exceptional demand for their blockbuster obesity and diabetes drugs. However, while both of them remain extremely lucrative, the two companies are likely to face headwinds in the coming period, with Eli cutting its Q4 outlook. At the same time, Novo struggles to raise the supply of its most popular drugs.

Weight-Loss Drugs Drive Growth for Eli Lilly and Novo Nordisk

Eli Lilly reported better-than-expected Q3 results on Thursday, propelling the stock slightly higher in Thursday premarket trading.

The company posted Q3 adjusted earnings per share (EPS) of 10 cents, notably better than the projected loss per share of 13 cents. During the quarter, Eli Lilly incurred a loss of $57.4 million, compared with a $1.45 billion profit from the year-ago period. When not considering excluding one-time items, Eli Lilly reported a per-share profit of 10 cents.

Revenue came in at $9.50 billion, up 37% year-over-year and above the consensus estimates of $8.95 billion. The revenue increase was mainly fueled by strong demand for the company’s antidiabetic medication, Mounjaro, and other treatments such as Verzenio and Jardiance.

Meanwhile, Eli Lilly’s European competitor, Novo Nordisk, also posted solid Q3 earnings, driven by the ever-growing popularity of its weight-loss drugs.

Notably, Novo generated sales of 58.7 billion Danish kroner ($8.3 billion) in the three-month period, representing a year-over-year jump of 38% at constant exchange rates. Quarterly earnings stood at 5 Danish kroner per share, up 58% from last year and above Wall Street’s projection of 4.81.

Eli Lilly Cuts Q4 Outlook; Novo Nordisk Remains Bullish

Although its Q3 top and bottom lines were solid, Eli Lilly’s expectations for full-fiscal 2023 results were not as promising.

The pharma behemoth trimmed its adjusted EPS guidance for the year to $6.50 to $6.70, significantly below the previous range of $9.70 to $9.90. However, the company reiterated its full-year revenue outlook of $33.4 billion to $33.9 billion.

Elsewhere, Novo Nordisk was more bullish when it comes to future performance. The Denmark-based drugmaker estimates 2023 sales to grow between 32% and 38% year-over-year, up from its previous forecast range of 27% to 33%.

The company’s robust results come amid strong interest in its blockbuster anti-obesity medications Wegovy and Ozempic, which have disrupted the industry over the past year. However, the drugmaker continues to struggle to raise the supply enough to meet demand.

Novo’s market value soared to around $430 billion in the wake of strong growth, making it one of the most valuable healthcare businesses in the world.

Analysts at Morgan Stanley (NYSE:MS) expect the weight-loss market to continue growing rapidly, which could serve as a catalyst for the stocks of companies developing such treatments.


This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.