Eli Lilly and Company (NYSE:LLY) witnessed a substantial uptick in demand for its weight-loss drug Zepbound, prompting a $2 billion upward revision in its annual sales forecast on Tuesday, propelling its shares nearly 6% higher.
The company anticipates significant production escalations in the latter half of the year for Zepbound and its associated diabetes medication, Mounjaro, both of which face shortages due to surging demand. CEO David Ricks emphasized the company’s relentless efforts to ramp up production to meet market needs, including acquisitions and expansion initiatives.
Lilly’s ambitious production plans include the acquisition of a manufacturing facility from Nexus Pharmaceuticals and the development of a $2.5 billion manufacturing site in Germany. Additionally, its Concord, North Carolina facility aims to commence Zepbound and Mounjaro production by year-end.
The soaring demand for tirzepatide-based medications has propelled Lilly’s market value above $700 billion, surpassing industry giants like Tesla and Walmart. With Eli Lilly and Danish competitor Novo Nordisk racing to bolster production, the weight-loss market, estimated to exceed $100 billion by the decade’s end, is witnessing a transformative surge.
Despite robust sales performance, Zepbound prescriptions lag behind Novo Nordisk’s Wegovy in the United States. Nevertheless, Lilly’s sales projections for 2024 have been revised upwards to $42.4 billion to $43.6 billion, accompanied by a corresponding increase in profit forecasts.
The company’s Q1 adjusted profit of $2.58 per share exceeded analysts’ expectations, further bolstering investor confidence. Lilly shares surged by 5.8% to $779.72 in early trading, marking a 26% increase year-to-date.
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