On February 6, 2025 Eli Lilly and Company (NYSE: LLY) reported its financial results for the fourth quarter of 2024 and detailed 2025 financial guidance (Press release, Eli Lilly, FEB 6, 2025, View Source [SID1234650082]).
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"2024 was a highly successful year for Lilly," said David A. Ricks, Lilly’s chair and CEO. "We had major data readouts for tirzepatide in treating chronic disease associated with obesity, invested billions more in expanding our manufacturing capacity and launched Kisunla and Ebglyss — important drivers of our long-term balanced growth outlook. We enter 2025 with tremendous momentum and look forward to strong financial performance and several important Phase 3 readouts which, if positive, will further accelerate our long-term growth."
Lilly shared numerous updates recently on key regulatory, clinical, business development and other events, including:
U.S. Food and Drug Administration (FDA) approval of Zepbound for a new indication as the first and only prescription medicine for moderate-to-severe obstructive sleep apnea (OSA) in adults with obesity;
FDA approval of Omvoh for the treatment of moderately to severely active Crohn’s disease in adults and a recommendation for approval by the European Medicines Agency’s Committee for Medicinal Products for Human Use;
Approval of Kisunla in China for the treatment of early symptomatic Alzheimer’s disease;
Positive topline results from the SURMOUNT-5 Phase 3b open-label randomized trial in which Zepbound (tirzepatide) showed a 47% greater relative weight loss compared to Wegovy (semaglutide) head-to-head;
Positive Phase 3 results from the BRUIN CLL-321 trial evaluating pirtobrutinib, a non-covalent (reversible) Bruton’s tyrosine kinase (BTK) inhibitor in adult patients with chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL) previously treated with a covalent BTK inhibitor;
Presentation and publication of the EMBER-3 study showing that imlunestrant (oral SERD), in patients with second-line ER+, HER2- metastatic breast cancer, reduced the risk of progression or death as a monotherapy in patients with ESR1 mutations, and in combination with Verzenio, regardless of ESR1 mutation status;
Positive Phase 2 results for muvalaplin, an investigational once-daily, orally administered selective inhibitor of lipoprotein(a) [Lp(a)], a genetically inherited risk factor for heart disease;
The announcement of an agreement to acquire Scorpion Therapeutics’ mutant-selective PI3Kα inhibitor program;
A commitment to expand the company’s manufacturing facility in Kenosha County, Wisconsin, with a $3 billion investment to enhance Lilly’s global parenteral (injectable) product manufacturing network; and
Announced a $15 billion share repurchase program and, for the seventh consecutive year, a 15% increase in Lilly’s quarterly dividend.
For information on important public announcements, visit the news section of Lilly’s website.
Financial Results
$ in millions, except
per share data
Fourth Quarter
2024
2023
% Change
Revenue
$ 13,532.8
$ 9,353.4
45 %
Net income – Reported
4,409.8
2,189.6
101 %
Earnings per share – Reported
4.88
2.42
102 %
Net income – Non-GAAP
4,805.5
2,249.4
114 %
Earnings per share – Non-GAAP
5.32
2.49
114 %
A discussion of the non-GAAP financial measures is included below under "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited)."
Fourth-Quarter Reported Results
In Q4 2024, worldwide revenue was $13.53 billion, an increase of 45% compared with Q4 2023, driven by a 48% increase in volume, partially offset by a 4% decrease due to lower realized prices. The volume increase was driven by growth from Mounjaro and Zepbound. Lower realized prices were primarily driven by Mounjaro, partially offset by Zepbound and Humalog. New Products1 revenue grew by $3.15 billion to $5.64 billion in Q4 2024, led by Zepbound and Mounjaro. Growth Products2 revenue increased 13% to $5.95 billion in Q4 2024 driven by growth in Verzenio and Jardiance, partially offset by lower Trulicity sales. The growth in Jardiance revenue included a one-time benefit of $300.0 million associated with an amendment to the company’s collaboration with Boehringer Ingelheim.
1 Lilly defines new products as select products launched since 2022, which currently consist of Ebglyss, Jaypirca, Kisunla, Mounjaro, Omvoh and Zepbound.
2 Lilly defines Growth Products as select products launched prior to 2022, which currently consist of Cyramza, Emgality, Jardiance, Olumiant, Retevmo, Taltz, Trulicity, Tyvyt and Verzenio.
Revenue in the U.S. increased 40% to $9.03 billion, driven by a 45% increase in volume, partially offset by a 5% decrease due to lower realized prices. The increase in U.S. volume was primarily driven by Zepbound and Mounjaro, partially offset by Trulicity. The lower realized prices in the U.S. were primarily driven by Mounjaro, partially offset by Zepbound and Humalog.
Revenue outside the U.S. increased 55% to $4.50 billion, driven by a 56% increase in volume. The volume increase outside the U.S was driven primarily by Mounjaro and, to a lesser extent, Verzenio. This volume increase also reflected the aforementioned $300.0 million payment received related to Jardiance.
Gross margin increased 47% to $11.13 billion in Q4 2024. Gross margin as a percent of revenue was 82.2%, an increase of 1.3 percentage points. The increase in gross margin percent was primarily driven by favorable product mix, partially offset by lower realized prices.
In Q4 2024, research and development expenses increased 18% to $3.02 billion, or 22.3% of revenue, driven by continued investments in the company’s early and late-stage portfolio.
Marketing, selling and administrative expenses increased 26% to $2.42 billion in Q4 2024, primarily driven by promotional efforts supporting ongoing and future launches.
In Q4 2024, the company recognized acquired in-process research and development (IPR&D) charges of $189.2 million compared with $622.6 million in Q4 2023. The Q4 2023 charges primarily related to the acquisition of Mablink Biosciences SAS and the business development transaction with Beam Therapeutics Inc.
In Q4 2024, the company recognized asset impairment, restructuring and other special charges of $344.0 million, compared with $67.7 million in Q4 2023. The charges in Q4 2024 primarily included an intangible asset impairment associated with Vitrakvi.
The effective tax rate was 12.5% in Q4 2024 compared with 12.7% in Q4 2023. The effective tax rate for Q4 2024 reflects a higher net discrete tax benefit compared with Q4 2023, as well as the favorable tax impact of the Vitrakvi impairment charge, partially offset by an unfavorable impact from the mix of earnings in higher tax jurisdictions.
In Q4 2024, net income and earnings per share (EPS) were $4.41 billion and $4.88, respectively, compared with net income of $2.19 billion and EPS of $2.42 in Q4 2023. EPS in Q4 2024 and Q4 2023 included acquired IPR&D charges of $0.19 and $0.62, respectively.
Fourth-Quarter Non-GAAP Measures
On a non-GAAP basis, Q4 2024 gross margin increased 46.0% to $11.26 billion. Gross margin as a percent of revenue was 83.2%, an increase of 0.9 percentage points. The increase in gross margin percent was primarily driven by favorable product mix, partially offset by lower realized prices.
The effective tax rate on a non-GAAP basis was 13.2% in Q4 2024 compared with 13.1% in Q4 2023. The effective tax rate for Q4 2024 was unfavorably impacted by a mix of earnings in higher tax jurisdictions, partially offset by a higher net discrete tax benefit compared with Q4 2023.
On a non-GAAP basis, Q4 2024 net income and EPS were $4.81 billion and $5.32, respectively, compared with net income of $2.25 billion and EPS of $2.49 in Q4 2023. Non-GAAP EPS in Q4 2024 and Q4 2023 included acquired IPR&D charges of $0.19 and $0.62, respectively.
For further detail on non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited)" table later in this press release.
Fourth Quarter
2024
2023
% Change
Earnings per share (reported)
$ 4.88
$ 2.42
102 %
Amortization of intangible assets
.12
.11
Asset impairment, restructuring and other special charges
.30
.06
Net losses (gains) on investments in equity securities
.02
(.11)
Earnings per share (non-GAAP)
$ 5.32
$ 2.49
114 %
Acquired IPR&D
.19
.62
(69) %
Numbers may not add due to rounding
Selected Revenue Highlights
(Dollars in millions)
Fourth Quarter
Full Year
Selected Products
2024
2023
% Change
2024
2023
% Change
Mounjaro
$ 3,530.1
$ 2,205.6
60 %
$ 11,540.1
$ 5,163.1
124 %
Verzenio
1,555.2
1,145.4
36 %
5,306.6
3,863.4
37 %
Trulicity
1,250.2
1,669.3
-25 %
5,253.5
7,132.6
-26 %
Zepbound
1,907.2
175.8
NM
4,925.7
175.8
NM
Jardiance(a)
1,198.4
798.1
50 %
3,340.9
2,744.7
22 %
Taltz
952.0
784.6
21 %
3,260.4
2,759.6
18 %
Humalog(b)
619.9
366.6
69 %
2,324.8
1,663.3
40 %
Total Revenue
13,532.8
9,353.4
45 %
45,042.7
34,124.1
32 %
(a) Jardiance includes Glyxambi, Synjardy and Trijardy XR
(b) Humalog includes Insulin Lispro
NM – not meaningful
Mounjaro
For Q4 2024, worldwide Mounjaro revenue increased 60% to $3.53 billion. U.S. revenue was $2.63 billion, an increase of 25%, reflecting continued strong demand and increased supply, partially offset by lower realized prices due to favorable changes in Q4 2023 to estimates for rebates and discounts. Revenue outside the U.S. increased to $898.9 million compared with $100.5 million in Q4 2023, primarily driven by volume growth in launched markets.
Verzenio
For Q4 2024, worldwide Verzenio revenue increased 36% to $1.56 billion. U.S. revenue was $1.04 billion, an increase of 35%, primarily driven by increased demand and wholesaler buying patterns. Revenue outside the U.S. was $513.0 million, an increase of 38%, primarily driven by increased demand.
Trulicity
For Q4 2024, worldwide Trulicity revenue decreased 25% to $1.25 billion. U.S. revenue decreased 36% to $799.8 million, driven by decreased sales volume primarily due to competitive dynamics and, to a lesser extent, lower realized prices primarily due to changes to estimates for rebates and discounts. Revenue outside the U.S. increased 9% to $450.4 million, driven by higher realized prices and increased volume.
Zepbound
For Q4 2024, U.S. Zepbound revenue was $1.91 billion, compared with $175.8 million in Q4 2023. Zepbound launched in the U.S. for the treatment of adult patients with obesity or overweight with weight-related comorbidities in November 2023.
Jardiance
For Q4 2024, the company’s worldwide Jardiance revenue increased 50% compared with Q4 2023 to $1.20 billion. U.S. revenue was $464.5 million, a decrease of 1%, driven by lower realized prices, largely offset by increased demand. Revenue outside the U.S. was $733.9 million, compared with $329.1 million in Q4 2023, primarily driven by a one-time payment received of $300.0 million associated with an amendment to the company’s collaboration with Boehringer Ingelheim. Pursuant to the amendment, we and Boehringer Ingelheim adjusted commercialization responsibilities for Jardiance within certain smaller markets.
Jardiance is part of the company’s alliance with Boehringer Ingelheim. Lilly reports as revenue royalties received on net sales of Jardiance.
Taltz
For Q4 2024, worldwide Taltz revenue increased 21% to $952.0 million. U.S. revenue increased 24% to $665.5 million, driven by higher realized prices due to changes in estimates for rebates and discounts, as well as increased demand. Revenue outside the U.S. increased 16% to $286.5 million, primarily driven by increased demand.
Humalog
For Q4 2024, worldwide Humalog revenue increased 69% to $619.9 million. U.S. revenue was $405.8 million compared with $167.6 million in Q4 2023, driven by higher realized prices primarily due to a one-time impact in Q4 2023 related to the implementation of list price decreases. Revenue outside the U.S. was $214.1 million, an increase of 8%, driven by higher realized prices in China and, to a lesser extent, increased volume.
2025 Financial Guidance
The company anticipates 2025 revenue to be between $58.0 billion and $61.0 billion. The midpoint represents approximately 32% growth compared to 2024, driven by new Lilly medicines such as Zepbound, Mounjaro, Jaypirca, Ebglyss, Omvoh and Kisunla; approvals of new indications for existing Lilly medicines; launches of Mounjaro in additional worldwide markets; and potential launches of new medicines such as imlunestrant for metastatic breast cancer. The company continues to invest heavily in increasing manufacturing capacity and estimates producing at least 1.6 times the amount of salable incretin doses in the first half of 2025, compared to the first half of 2024.
The ratio of (Gross Margin – OPEX) / Revenue, where OPEX is defined as the sum of research and development expenses and marketing, selling and administrative expenses, is expected to be in the range of 40.5% and 42.5% on a reported basis and 41.5% and 43.5% on a non-GAAP basis.
Other income (expense) is expected to be expense in the range of $700 million to $600 million, primarily driven by higher interest expense.
The 2025 effective tax rate is expected to be approximately 16%.
EPS for 2025 is expected to be in the range of $22.05 to $23.55 on a reported basis and $22.50 to $24.00 on a non-GAAP basis. The company’s 2025 financial guidance reflects adjustments shown in the reconciliation table below.
2025
Guidance
Earnings per share (reported)
$22.05 to $23.55
Amortization of intangible assets
.45
Earnings per share (non-GAAP)
$22.50 to $24.00
Numbers may not add due to rounding
The following table summarizes the company’s 2025 financial guidance:
2025 Guidance(1)
Revenue
$58.0 to $61.0 billion
(Gross Margin – OPEX(2)) / Revenue:
(reported)
40.5% to 42.5%
(non-GAAP)
41.5% to 43.5%
Other Income/(Expense)
($700) to ($600) million
Tax Rate
Approx. 16%
Earnings per Share (reported)
$22.05 to $23.55
Earnings per Share (non-GAAP)
$22.50 to $24.00
(1) Non-GAAP guidance reflects adjustments presented in the earnings per share reconciliation table above.
(2) OPEX is defined as the sum of research and development expenses and marketing, selling and administrative expenses.
Webcast of Conference Call
As previously announced, investors and the general public can access a live webcast of the Q4 2024 financial results conference call through a link on Lilly’s website at investor.lilly.com/webcasts-and-presentations. The conference call will begin at 10 a.m. Eastern time today and will be available for replay via the website.