Revenue Growth: 26% increase in Q1, driven by new products growing nearly $1.8 billion compared to the same period last year.
Gross Margin: Increased from 78.4% in Q1 2023 to 82.5% in Q1 2024, benefiting from higher realized prices, variable product mix, and improved production costs.
Expenses:
Marketing, selling, and administrative expenses increased by 12%, primarily due to promotional efforts and increased compensation and benefit costs.
R&D expenses increased by 27%, driven by higher development expenses for late-stage assets and additional investments in early-stage research.
Operating Income: Increased 63% in Q1, driven by higher revenue from new products, partially offset by operating expense growth.
EPS: Earnings per share of $2.58 in Q1, a 59% increase compared to Q1 2023.
Future Guidance
Revenue Outlook: Increased full-year revenue outlook by $2 billion to be between $42.4 billion to $43.6 billion, primarily due to the strong performance of Mounjaro and Zepbound.
Gross Margin vs. OpEx: Ratio of gross margin less OpEx divided by revenue expected to be in the range of 32% to 34% on a reported basis and 33% to 35% on a non-GAAP basis.
EPS Guidance: Now expects EPS to be in the range of $13.05 to $13.55 on a reported basis and $13.50 to $14 on a non-GAAP basis.
Trends, Market Conditions, Sentiment
Product Launches: Strong revenue growth in Q1 was primarily driven by recent product launches, notably Mounjaro and Zepbound.
Manufacturing Expansion: Lilly is executing on an ambitious manufacturing expansion agenda, including acquiring an injectable medicine facility and breaking ground on a new manufacturing site in Germany.
Pipeline Milestones: Key milestones included positive Phase III results for tirzepatide in obstructive sleep apnea, approval of a multi-dose quick pen delivery device for Mounjaro in Europe, and significant advancements in the immunology and oncology pipelines.
Demand Outstripping Supply: For incretin medicines, demand continues to outstrip supply, but significant increases in shipment volumes are expected in the second half of the year.
Market Sentiment: Positive, with strong performance from new products and strategic investments in manufacturing and pipeline development expected to sustain long-term growth.
Notable Quotes
”Our focus is to bring innovative medicines to people in need. And in 2024, we’re investing in our people, our launches, expanding our pipeline of new medicines.” - David Ricks, CEO
”We delivered earnings per share of $2.58 in Q1, a 59% increase compared to Q1 2023, inclusive of the negative impact of $0.10 from acquired IPR&D charges in both periods.” - Anat Ashkenazi, CFO
”The demand for tirzepatide is very strong. And each week, hundreds of thousands of people fill scripts from Mounjaro and Zepbound yet we understand the frustration from those facing prescription delays.” - Patrik Jonsson, President of Lilly Diabetes and Obesity and Lilly U.S.A.
”We are continuing to invest in recent and upcoming launches, internal and external pipeline development and our manufacturing expansion agenda.” - David Ricks, CEO
