Eli Lilly & Co. Inc.’s
LLY,
steady transformation into a developer of both cutting-edge diabetes and obesity treatments is well underway.
The drugmaker said Tuesday that sales of Mounjaro, its new Type 2 diabetes therapy, far exceeded Wall Street’s expectations in the third quarter of the year. The drug brought in $187.3 million in sales in its first full quarter on the market since the Food and Drug Administration approved it in May, against a FactSet consensus of $79.0 million.
Mounjaro’s sales are peanuts compared with the year-over-year performance of Trulicity, the company’s top-selling drug and a diabetes treatment that generated $1.8 billion in sales for the quarter. But the “impressive initial uptake” of Mounjaro, as described by Lilly CEO David Ricks on Tuesday’s earnings call, reveals where the company is headed.
“We see fighting obesity as a long-term goal for Eli Lilly & Co.,” Dan Skovronsky, Lilly’s chief scientific and medical officer, said during the call, “and so there will be multiple generations of drugs here, we hope.”
Mounjaro is part of a new class of injectables that uses hormones called incretins to manage conditions like Type 2 diabetes. The same drug, which goes by the generic name of tirzepatide, is also being tested in clinical trials as a treatment for people with obesity or overweight. Those studies have indicated the drug can help people lose up to 22% of their body weight.
Lilly plans to seek FDA approval for the new indication in the first half of next year.
Though the company has long held a leading role in the diabetes marketplace, the move into weight management is new—and one that it appears to be taking very seriously. Nearly every question during Tuesday’s earnings call focused on Mounjaro, also known as tirzepatide. (“Seems like it’s a Mounjaro call,” one analyst quipped.)
UBS analysts have predicted Lilly’s obesity drug could generate $25 billion in peak sales if approved, while Morgan Stanley analysts have said the overall market for weight-management drugs could hit $54 billion by 2030.
Novo Nordisk’s
NOVO.B,
has a similar set of drugs: Ozempic for Type 2 diabetes and Wegovy for obesity — both of which are in the class of drugs as tirzepatide. The Danish drugmaker said it experienced over-the-top demand for Wegovy when it was approved in 2021. However, that drug has been in short supply as a result of manufacturing issues since the end of last year, as have some doses of Ozempic.
“We have seen unprecedented demand for Mounjaro’s type 2 diabetes launch in the U.S. bolstered by strong efficacy and a positive customer experience,” said Lilly CFO Anat Ashkenazi. “Availability of competitor’s incretin also is a key factor as we assess Mounjaro’s demand and supply.”
It makes sense, then, why executives talked up Lilly’s manufacturing capabilities for incretins and a copay program that allows people to pay only $25 out-of-pocket for Mounjaro. (Novo’s copay program for Wegovy had the same price.) Because of Wegovy’s supply issues, some physicians have said they prescribe Ozempic off-label to their patients with obesity. It’s unclear how many of the quarter’s Mounjaro prescriptions are off-label, though one analyst posed that question to Mike Mason, president of Lilly Diabetes.
“We saw about two-thirds of new patients starting Mounjaro with a history of type 2 diabetes medications,” he said. “For the remaining one-third of patients who are classified as naive to diabetes treatments, these individuals can either be newly diagnosed Type 2 diabetes patients or individuals who haven’t yet been diagnosed with Type 2 diabetes.”
Lilly’s stock has gained 25.6% so far this year, while the broader S&P 500
SPX,
is down 18.7%.
