Skip to content
    LLY
    Earnings call· Dec 2024(Q4 FY24)

    ELI LILLY Q4 FY24 earnings call LLY

    Feb 6, 2025 Source

    Executive summary

    Eli Lilly Q4 FY24 — Strong Incretin Growth and Pipeline Advancement

    Eli Lilly delivered a strong Q4 FY24, driven by robust growth in its incretin franchise, Mounjaro and Zepbound, which also led to significant revenue and EPS beats for the full year. The company is aggressively expanding manufacturing capacity and advancing a broad pipeline, including multiple Phase III programs for Orforglipron and Retatrutide. While facing some pricing headwinds and Trulicity declines, Lilly remains highly bullish on the long-term potential of the obesity market and its pipeline, balancing investment in R&D with sustainable growth.

    Highlights

    5

    • Full-year 2024 revenue grew 32% compared to 2023, exceeding initial guidance by $4 billion.

    • Q4 revenue grew 45%, driven by Mounjaro and Zepbound, with new products contributing over $3.1 billion.

    • Zepbound became the market leader in the anti-obesity market by new prescriptions in Q4.

    • Increased incretin manufacturing capacity, expecting to produce 1.6x salable doses in H1 2025 vs H1 2024.

    • Announced a $15 billion share repurchase program and a 15% increase in quarterly dividend.

    Concerns

    4

    • Trulicity revenue declined 25% due to Mounjaro switches and lower realized prices.

    • Forecast overall net prices to decline by mid- to high single digits in percentage terms in 2025, including U.S. Part D changes.

    • Foreign exchange expected to be a headwind in 2025 due to dollar strengthening.

    • Discontinuation of VOLENRELAXIN program in heart failure and CKD due to disappointing Phase II results.

    Guidance & targets

    24
    CategoryTargetConfidence
    Full-year 2025 Revenue
    $58 billion to $61 billion
    high materiality
    High
    Full-year 2025 Non-GAAP EPS
    $22.50 to $24.00
    high materiality
    High
    Full-year 2025 Net Price Decline
    mid- to high single digits
    medium materiality
    Medium
    Full-year 2025 Gross Margin less OpEx Ratio
    41.5% to 43.5%
    medium materiality
    High
    Full-year 2025 Effective Tax Rate
    approximately 16%
    low materiality
    High
    Full-year 2025 Other Expenses
    $600 million to $700 million
    low materiality
    High
    Incretin Salable Doses Production
    1.6x
    high materiality
    High
    Concord Facility Shipping
    begin shipping medicines
    medium materiality
    High
    Mounjaro International Revenue Contribution
    more significantly
    medium materiality
    Medium
    Trulicity Volume Trend
    continue declining
    medium materiality
    High
    Oncology, Neuroscience, Immunology Revenue Growth
    grow revenue
    low materiality
    Medium
    Foreign Exchange Impact
    headwind
    medium materiality
    High
    Olomorasib Phase III Program Initiation
    initiate
    medium materiality
    High
    Orforglipron Phase III Program Initiation
    initiate
    medium materiality
    High
    Orforglipron ACHIEVE-1 (T2D) Readout
    Q2 this year
    high materiality
    High
    Orforglipron Additional T2D Trials Readout
    second half of 2025
    medium materiality
    High
    Orforglipron T2D Submission
    2026
    medium materiality
    Medium
    Orforglipron ATTAIN-1 and ATTAIN-2 (Obesity) Readout
    Q3 of this year
    high materiality
    High
    Orforglipron Obesity Regulatory Submission
    late in 2025
    high materiality
    High
    Tirzepatide SURPASS-CVOT Data
    Q3
    high materiality
    High
    Retatrutide TRIUMPH-4 Data
    late this year
    high materiality
    High
    Orforglipron Launch
    begin in early '26
    high materiality
    High
    Zepbound Medicare Coverage for OSA
    some Medicare coverage
    medium materiality
    Medium
    Ebglyss Commercial Access
    commercial access with 2 of the largest pharma benefit managers
    low materiality
    High

    Segment performance

    14
    SegmentRevenueYoYQoQMargin
    New Products
    Led by strong uptake of Mounjaro and Zepbound.
    Contribution to Q4 growth: >$3.1 billion
    		$5.6 billionmore than doubled——
    Mounjaro
    Global sales in Q4.
    		$3.5 billion———
    Zepbound
    U.S. sales in Q4. Became market leader in anti-obesity by new prescriptions in Q4.
    		$1.9 billion———
    Non-Incretin Portfolio
    Growth in Q4, excluding one-time payments related to business development.
    		—20%——
    Jaypirca
    Worldwide revenue in Q4, adding another solid quarter of sequential growth.
    		$114 million———
    Omvoh
    Worldwide revenue in Q4. Recently received FDA approval in Crohn's disease.
    		$57 million———
    Growth Products
    Revenue increased compared to Q4 2023.
    		—13%——
    Verzenio
    Benefited from strong execution in early breast cancer indication and increased U.S. wholesaler stocking at year-end.
    U.S. total prescription growth: 15%
    		————
    Trulicity
    Worldwide revenue declined, driven by Mounjaro switches and lower realized prices.
    		—-25%——
    U.S.
    Driven by Zepbound and Mounjaro, partially offset by Trulicity declines.
    Volume growth: 45%
    		—40%——
    Europe
    Benefited from Mounjaro uptake and a one-time payment related to Boehringer Ingelheim alliance amendment.
    Growth excluding one-time payment: 61%
    		—82% in constant currency——
    Japan
    Volume growth driven by Mounjaro, Omvoh, Jardiance, and Verzenio.
    		—27% in constant currency——
    China
    Volume growth driven by Tyvyt and Verzenio. Mounjaro recently available with limited launch due to supply limitations.
    		—13% in constant currency——
    Rest of the World
    Driven by volume growth of Mounjaro and Verzenio.
    		—46% in constant currency——

    Operational metrics

    22
    Full-year Revenue Growth
    32%YoY
    FY24

    Compared to 2023, exceeding initial guidance by $4 billion.

    Q4 Revenue Growth
    45%YoY
    Q4 FY24

    Compared to Q4 2023.

    Gross Margin Percentage
    83.2%
    Q4 FY24

    Primarily impacted by favorable product mix.

    R&D Expenses Growth
    18%YoY
    Q4 FY24

    From continued investment in early and late-stage portfolio.

    Marketing, Selling and Administrative Expenses Growth
    26%YoY
    Q4 FY24

    Mainly driven by promotional efforts for ongoing and future launches, including U.S. direct-to-consumer advertising and international Mounjaro launches.

    Operating Income Growth
    more than doubledYoY
    Q4 FY24

    Increasing to $5.6 billion, driven by higher revenue from new products.

    Effective Tax Rate
    13.2%
    Q4 FY24
    Non-GAAP EPS
    $5.32vs $2.49 in Q4 2023
    Q4 FY24

    Inclusive of $0.19 of acquired IPR&D charges, compared to $2.49 in Q4 2023 which included $0.62 of acquired IPR&D.

    Share Repurchase Program
    $15 billion
    announced end of 2024

    New program announced at the end of 2024.

    Quarterly Dividend Increase
    15%
    announced end of 2024

    Seventh consecutive 15% increase.

    Manufacturing Investments
    $23 billion
    since 2020

    Total commitments to build, expand, and acquire manufacturing facilities since 2020.

    Zepbound Commercial Access
    87%
    current

    Coverage in the commercial space.

    Zepbound Employer Opt-in
    north of 50%
    current

    Employer opt-in for Zepbound.

    Kisunla P&T Approvals
    over 80%
    current

    In key accounts.

    Kisunla Prescribers
    over 800
    current
    Blood Diagnostics Use
    more than doublingYoY
    last year

    Use of blood diagnostics for Alzheimer's.

    Mounjaro Adherence
    longervs Trulicity and Ozempic
    Q2 2023 cohort

    For patients who started in Q2 2023, adherence is longer than Trulicity and Ozempic.

    Zepbound TRx via Lilly Direct
    low to mid-single digit
    current

    Percentage of total Zepbound TRx.

    Zepbound New Therapy Starts via Lilly Direct
    low teens
    current

    Percentage of new Zepbound therapy starts.

    Orforglipron Phase III Dosing
    6 escalating doses
    current

    In ACHIEVE-1 trial, utilizing 6 escalating doses in 4-week increments to a maximum dose of 36 milligrams.

    Orforglipron ACHIEVE-1 Study Duration
    40-week
    current

    Study duration for ACHIEVE-1 in patients with type 2 diabetes.

    Retatrutide TRIUMPH-4 Study Duration
    68-week
    current

    Study duration for TRIUMPH-4 in patients with osteoarthritis of the knee.

    Industry KPIs

    10
    MetricValueDetails
    Prescription volume15%%
    EPS revenue guidanceRevenue: $58B-$61B; Non-GAAP EPS: $22.50-$24.00USD
    Pricing policy impactmid- to high single digits% decline
    Pipeline clinical milestones8 new Phase III programs started in 2024; 2 new Phase III programs expected to initiate in 2025
    Regulatory approvals filingsKisunla, Ebglyss, Zepbound (OSA), Omvoh (Crohn's disease) approvals in 2024; Imlunestrant (metastatic breast cancer), Tirzepatide (heart failure), Jaypirca (BRUIN CLL-321 data) submissions completed
    Therapeutic drug market sharemarket leader
    Price volume mix decomposition-5%%
    Glp 1 incretin franchise metricsMounjaro global sales $3.5B; U.S. Zepbound sales $1.9BUSD
    Geographic regional revenue growthU.S.: 40%; Europe: 82% (61% ex-one-time payment); Japan: 27%; China: 13%; Rest of World: 46%%
    Clinical trial efficacy safety data47% greater relative weight loss%

    Product announcements

    4
    ProductTypeDetails
    Kisunlalaunch
    Ebglysslaunch
    Zepboundexpansion
    Omvohexpansion

    Deals & partnerships

    5
    Morphic TherapeuticsAcquisition of Morphic Therapeutics.

    Acquired Morphic Therapeutics to complement pipeline.

    OpenAICollaboration to invent novel antimicrobials.

    Announced a collaboration with OpenAI to invent novel antimicrobials.

    Scorpion TherapeuticsAcquisition of mutant-selective PI3Ka inhibitor program.

    Announced plans to acquire Scorpion Therapeutics' mutant-selective PI3Ka inhibitor program, adding a clinical stage breast cancer asset.

    Boehringer IngelheimAmendment of alliance.

    One-time payment associated with the amendment of alliance with Boehringer Ingelheim, recorded in Jardiance's revenue in Q4.

    RowePartnership to provide option for eligible patients to purchase FDA-approved authentic medicines.

    Partnership is not financial or marketing, but connects Rowe platform to Lilly Direct self-pay pharmacy for eligible patients to purchase authentic medicines.

    Risks & headwinds

    7
    Trulicity Volume DeclineQ4 FY24 and ongoing

    25% decline in worldwide revenue in Q4

    Mitigation: Focus on new incretin launches (Mounjaro switches are a driver of decline).

    Net Price ErosionFY25

    mid- to high single digits percentage decline

    Mitigation: Not explicitly stated, but implies managing gross-to-net and market access.

    Foreign Exchange HeadwindFY25

    anticipated headwind

    Mitigation: Not explicitly stated.

    Compounding of GLP-1 Medicinesongoing

    unsafe practice

    Mitigation: Lilly is actively opposing compounding through litigation and advocating for FDA enforcement.

    Alzheimer's System Readiness and Diagnosis Capacityongoing

    significant area of opportunity

    Mitigation: Partnering with healthcare providers, providing educational series, and offering solutions to increase throughput for patients.

    Challenges in Outcomes Trialsfuture

    more and more difficult to do

    Mitigation: Exploring options for outcomes trials around the world, particularly where maintaining patients on placebo is feasible.

    Turbulence and Prediction Challenges in Incretin Marketongoing

    turbulence and prediction challenges

    Mitigation: Aggressively building manufacturing capacity, aiming for full-scale launches not gated by supply (e.g., Orforglipron), and remaining bullish on long-term demand.

    What to watch in Q1 FY25

    5

    Orforglipron ACHIEVE-1 (T2D) Readout

    Q2 FY25
    CurrentPhase III trial ongoing
    TargetData readout

    Why it matters

    This is the first Phase III data readout for Orforglipron in type 2 diabetes, crucial for understanding its efficacy and tolerability profile.

    We anticipate ACHIEVE-1 will read out in Q2 this year, followed by up to 4 additional type 2 diabetes trials in the second half of 2025 and a potential submission for this indication in 2026.

    Q&A highlights

    5

    Does the 2025 guidance require acceleration in prescription uptake trends, or can it be met with a continuation of the current trajectory?

    The 2025 guidance is built on the assumption of a continuation of the total prescription growth seen in the market in 2024.

    “We mentioned in my notes that what we expect to see, Tim, is a continuation of basically the total prescription growth that we have seen in 2024. So that's what we built in our 2025 guide.”

    asked by Tim Anderson · answered by Lucas Montarce

    2 min read6 chapters

    Detailed Narrative

    01

    Incretin Market Leadership and Supply Expansion

    Lilly's incretin medicines, Mounjaro and Zepbound, drove significant Q4 revenue growth, with Zepbound becoming the market leader in new anti-obesity prescriptions. The company is aggressively expanding manufacturing capacity, aiming to produce 1.6x more salable incretin doses in H1 2025 compared to H1 2024, with a new facility in Concord expected to ship medicines this year. This expansion addresses high demand and supports global launches.

    02

    Pipeline Advancements and Strategic Investments

    Lilly initiated 8 new Phase III programs in 2024 and plans to start two more in 2025, including olomorasib for adjuvant non-small cell lung cancer and Orforglipron for hypertension. The company is also scaling R&D investment and exploring new applications for incretin biology in neuroscience and immunology, with several clinical trials planned for brain health, substance use disorder, pain, neuropsychiatry, and inflammation.

    03

    Orforglipron Development Strategy

    Orforglipron, an oral GLP-1, is a key focus, with multiple Phase III readouts expected in 2025 for type 2 diabetes (Q2 and H2) and obesity (Q3). The goal is to achieve efficacy and tolerability similar to injectable single-acting GLP-1s, with initial regulatory submissions for obesity expected late 2025, followed by type 2 diabetes in 2026. The company is building manufacturing capacity for a full-scale launch, not gated by supply.

    04

    Zepbound Access and Compounding Litigation

    Zepbound maintains strong commercial access (87% coverage) with over 50% employer opt-in. The recent OSA label is expected to improve Medicare and Medicaid coverage in H2 2025. Lilly continues to oppose compounding, citing full supply and safety concerns, with a court date on February 18 regarding a specific compounding form. The company believes compounding is an unsafe practice that should not exist.

    05

    Kisunla and Ebglyss Launch Momentum

    Kisunla's launch is progressing well, with over 80% P&T approvals in key accounts and increasing diagnostic orders. Ebglyss shows early positive receptivity, with commercial access from two major PBMs expected in March, prompting accelerated investment in commercial activities. The company is leveraging lessons from prior Alzheimer's drug launches to improve system readiness for Kisunla, focusing on capacity to detect and diagnose patients.

    06

    VOLENRELAXIN Program Discontinuation

    Lilly discontinued the VOLENRELAXIN program in heart failure and CKD following disappointing Phase II trial results. While the relaxin mechanism is considered interesting and validated by human physiology, the specific molecule did not support further development. Other companies are pursuing this mechanism.

    AI-generated summary of the company’s earnings call. Not investment advice.