Eli Lilly is expecting supply disruptions for its blockbuster weight loss and diabetes products to continue through the end of this year, executives told investors.
During its first-quarter earnings call on Tuesday, the company said it’s rapidly expanding its manufacturing capacity, with six sites currently under construction or ramping up, and a seventh it recently purchased. CFO Anat Ashkenazi expects Lilly to produce 1.5-times more doses of its incretin medicines in the second half of 2024 compared to the same period in 2023.
“We’re doing construction overnight. We’re making the right investments,” she told investors. “Even with that, I expect that the demand will outpace supply through this year.”
Both versions of Lilly’s GIP/GLP-1 agonist — Mounjaro for type 2 diabetes and Zepbound for weight loss — are currently in short supply, according to the FDA, and all but the 2.5 mg starting doses are experiencing “limited availability” due to rising demand.
That demand buoyed the company’s sales for the quarter to $8.77 billion. It also led Lilly to raise its full-year guidance by $2 billion. Its shares $LLY were up nearly 6% on Tuesday afternoon.
The pharma giant credited the sales boost — a 26% increase compared to the same period in 2023 — to increases in both volume (16%) and realized prices (10%). Tirzepatide alone accounted for more than $2 billion in revenue, including $1.8 billion for Mounjaro and $517 million for Zepbound, which was approved in November.
On the other hand, Lilly reported that sales of its older GLP-1 diabetes drug Trulicity dropped 26% to $1.46 billion, with lower sales “primarily due to supply constraints and competitive dynamics.”
“In the short- to mid-term, Lilly expects sales growth for incretin medicines to primarily be a function of the quantity the company can produce and ship,” the company wrote in a press release.
In addition to Mounjaro and Zepbound, Lilly cited the breast cancer treatment Verzenio and diabetes therapy Jardiance as other drivers of growth in the quarter. Verzenio sales jumped 40% to $1.05 billion. (The drug failed a prostate cancer trial, however, leading to a $75 million charge.) Jardiance saw a 19% jump in sales to $687 million.
In Alzheimer’s, a disease that has perplexed Lilly and other drugmakers for decades, the company now expects an FDA advisory committee for its candidate donanemab to take place in mid-2024.
Lilly had initially expected the amyloid-targeted antibody to win approval in the last quarter of 2023, but the FDA delayed its decision and is now seeking advice from its advisory committee. Lilly’s experimental therapy trails Eisai and Biogen’s Leqembi, which has had slower uptake than originally projected due to insurance constraints and rollout hurdles.
Other highlights from Lilly’s investor call:
- CMS coverage: CMS recently opened the door for the coverage of obesity drugs if they are used to treat an additional medical condition. Patrik Jonsson, president of Lilly’s diabetes and obesity units, hopes a potential new indication for Zepbound in sleep apnea will lead to Medicare coverage “at the time of launch.” The drug recently hit its primary endpoints in two Phase 3 trials for adults with obstructive sleep apnea and obesity.
- Building on tirzepatide: Daniel Skovronsky, chief scientific officer of Lilly Research Laboratories, touted a “number of opportunities for improvement” in obesity, including its Phase 3 oral candidate orforglipron. A new approval could help ease supply constraints, as executives noted that they are confident in Lilly’s existing capacity to produce an oral drug.
- Donanemab’s adcomm: Lilly’s neuroscience president Anne White didn’t offer much detail on the anticipated FDA adcomm for donanemab. But she did say panelists will likely discuss limited duration dosing, meaning the chance to stop dosing once patients have cleared plaques, and the assessment of tau at baseline. “We are incredibly confident in donanemab’s potential,” she said.