Lilly raises 2020 earnings forecast on pandemic stockpiling

Stockpiling of drugs for chronic diseases like diabetes during the coronavirus pandemic lifted Eli Lilly’s first-quarter results, and caused it to raise profit predictions for the year.

Lilly is the first drugmaker to report a hike in sales driven by the COVID-19 outbreak, estimating that stockpiling swelled worldwide revenues by around $250 million in the first three months of the year, mainly coming from Trulicity (dulaglutide) and insulins for diabetes as well as psoriasis treatment Taltz (ixekizumab).

All told, Lilly’s sales rose 15% to $5.86 billion, and while the company kept its forecast for full-year sales at $23.7 billion to $24.2 billion, it raised the top end of its estimated 2020 earnings per share (EPS) range by 10 cents, to $6.70-$6.90.

Shares in Lilly were up around 2.65% after the results announcement, which saw Trulicity grow by an impressive 40% to $1.23 billion in the quarter and Taltz surge 76% to $443 million.

Both drugs performed well despite having to jostle for share in increasingly competitive markets, with Trulicity benefiting from its recent FDA approval for the reduction of major adverse cardiovascular events (MACE) in high-risk type 2 diabetes patients. That helped it fend off a challenge from Novo Nordisk, its arch-rival in the GLP1 agonist drug category.

IL-17 inhibitor Taltz’s growth came despite playing catch-up with Novartis’ category leader Cosentyx (secukinumab).

Lilly’s blockbuster insulin brand Humalog (insulin lispro) saw revenues fall 5% to $696 million thanks to price cutting, but still performed better than expected by analysts, while biosimilar Basaglar (insulin glargine) grew 21% to $304 million.

Chief financial officer Josh Smiley said that Lilly “exited 2019 with strong revenue growth and margin expansion, driven by the uptake of our newer medicines.”

He went on to say that “momentum continued in Q1 2020 and was augmented by higher patient and supply chain purchasing due to the COVID-19 pandemic,” but also sounded a note of caution.

“Our revenue and operating margin outlook for 2020 is unchanged, but the economic and healthcare consequences of this pandemic are uncertain and could negatively affect our financial results later in 2020 and beyond,” he warned.

The update comes after Roche saw pressure on some drugs in the first quarter, such as multiple sclerosis therapy Ocrevus (ocrelizumab), as a result of delayed appointments caused by the pandemic. That was offset by rocketing sales of arthritis therapy Actemra, which could have a role to play in treating severe coronavirus infections.

Meanwhile, Johnson & Johnson – often the first big pharma group to report – lowered its earnings forecast due to COVID-19, saying that the economic impact of the pandemic and lockdowns would start to have an impact later in the year.