Eli Lilly (LLY) to Report Q1 Earnings: Will It Beat Estimates?
We expect Eli Lilly & Company LLY to beat expectations when it reports first-quarter 2023 results on Apr 27, before market open. In the last reported quarter, the company delivered an earnings surprise of 14.21%.
This large drugmaker’s performance has been mixed, with the company missing earnings expectations in one of the last four quarters while beating in three. Lilly delivered a four-quarter negative earnings surprise of 0.73%, on average.
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Lilly’s stock has risen 35.1% in the past year compared with an increase of 11.1% for the industry.
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Factors to Consider
In the first quarter, higher demand and volume growth for Lilly’s key drugs, including Trulicity, Taltz, Verzenio, Jardiance and Emgality are likely to have provided top-line support.
The Zacks Consensus Estimate for Trulicity, Taltz, Verzenio, Jardiance, Olumiant and Emgality is $1.78 billion, $562 million, $776 million, $543 million, $214 million and $172 million, respectively.
Our estimates for Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality are $1.77 billion, $558.6 million, $702.6 million, $524.5 million, $230.3 million and $180.2 million, respectively.
Newer products like Retevmo and Mounjaro (tirzepatide) are likely to have contributed to sales growth. In the second half of 2022, Mounjaro, approved in May 2022, saw an impressive initial uptake. The trend is expected to have continued in the first quarter. Our model estimates Mounjaro sales to be $374.3 million.
While volumes are expected to have increased for most drugs, lower realized prices due to changes to estimates for rebates and discounts as well as updated 2022 NRDL price reductions in China are likely to have continued hurting sales of most drugs, mainly Taltz. Currency headwinds are also likely to have hurt the top line.
Lilly expects lower COVID-19 antibody sales (since the FDA rescinded the authorization granted to its COVID-19 antibody bebtelovimab last November) to hurt revenues significantly in 2023 compared to 2022 levels, with the impact being most prominent in the first quarter of 2023. The company had recorded $1.5 billion of COVID-19 antibody sales in the first quarter of 2022. Lilly does not expect to record any COVID-19 antibody revenues in 2023.
In addition, the loss of exclusivity of Alimta in the United States in the second quarter of 2022 is expected to have hurt year-over-year growth in the first quarter of 2023 and will also remain an overhang in the second quarter.
Sales of most established drugs like Forteo, Humalog and Humulin are likely to have declined in the quarter.
Key Events in Q1
In January, the FDA granted accelerated approval to the BTK inhibitor, Jaypirca/pirtobrutinib (for the treatment of relapsed or refractory mantle cell lymphoma in adult patients previously treated with at least two lines of systemic therapy, including a BTK inhibitor).
In the same month, the FDA also issued a complete response letter (CRL) to its biologics license application (BLA) seeking accelerated approval for donanemab for the treatment of early symptomatic Alzheimer's disease. The BLA was based on data from the phase II TRAILBLAZER-ALZ study, which showed that donanemab led to amyloid plaque reduction.
The FDA rejected the BLA as it believes the accelerated approval submission includes data for only a limited number of patients with 12-month drug exposure. The FDA has asked Lilly to include data from at least 100 patients who received a minimum of 12 months of continued treatment with donanemab.
Investors expect an update on donanemab and commercialization plans for Jaypirca on the first-quarter conference call.
Earnings Whispers
Our proven model predicts an earnings beat for Lilly in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: Lilly’s Earnings ESP is +5.94% as the Most Accurate Estimate of $1.74 is higher than the Zacks Consensus Estimate of $1.64 You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lilly has a Zacks Rank #3.
Other Stocks to Consider
Here are some large drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:
Sanofi SNY has an Earnings ESP of +1.62% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sanofi’s stock has risen 3.9% in the past year. Sanofi beat earnings estimates in three the last four quarters while missing in one. SNY has a four-quarter average earnings surprise of 7.68%, on average. SNY is scheduled to release its fourth-quarter results on Apr 27.
Novo Nordisk NVO has an Earnings ESP of +10.71% and a Zacks Rank #1.
Novo Nordisk’s stock has risen 51.8% in the past year. Novo Nordisk topped earnings estimates in three of the last four quarters while missing in one and has a four-quarter earnings surprise of 3.0%, on average. NVO is scheduled to release its first-quarter results on May 4.
Amgen AMGN has an earnings ESP of 1.82% and a Zacks Rank #3.
Amgen beat earnings estimates in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 3.43%, on average. Amgen’s stock has declined 3.3% in the past year. Amgen is expected to report first-quarter results on Apr 27, after market close
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