ELI LILLY AND COMPANY Eli Lilly and Company Q1 2024 Earnings Call
April 30, 2024
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Safe Harbor Provision
This presentation contains forward-looking statements that are based on management's current expectations, but actual results may differ materially due to various factors. The company's results may be affected by factors including, but not limited to, the risks and uncertainties in pharmaceutical research and development; competitive developments; regulatory actions; litigation and investigations; business development transactions; economic conditions; and changes in laws and regulations, including health care reform.
For additional information about the factors that affect the company's business, please see the company's latest Form 10-K and subsequent Forms 10-Q and 8-K filed with the Securities and Exchange Commission. Certain financial information in this presentation is presented on a non-GAAP basis. Investors should refer to the reconciliations included in this presentation and should consider the company's non-GAAP measures in addition to, not as a substitute for or superior to, measures prepared in accordance with GAAP.
These materials are not intended to promote the products referenced herein or otherwise influence healthcare prescribing decisions.
The company undertakes no duty to update forward-looking statements
except as required by applicable law
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Agenda
Introduction and Key Events
Dave Ricks, Chair and Chief Executive Officer
Q1 2024 Financial Results
Anat Ashkenazi, Chief Financial Officer
R&D Update
Dan Skovronsky, M.D., Ph.D., Chief Scientific Officer
Closing Remarks
Dave Ricks, Chair and Chief Executive Officer
Question & Answer Session
2024 Q1 EARNINGS | 3 |
Strategic Deliverables
PROGRESS SINCE THE LAST EARNINGS CALL
Invest in Current Portfolio
- Gross Margin: Non-GAAP gross margin of 82.5% in Q1
- SG&A: 12% increase in Q1 primarily driven by promotional efforts supporting launches as well as increased compensation and benefit costs
Invest in Future Innovation
- R&D: 27% increase in Q1 driven by higher development expenses for late-stage assets and additional investments in early-stage research
- Business Development: Announced an agreement to acquire an injectable medicine manufacturing facility with production targeted to begin at the end of 2025
- Capex: Progressed manufacturing expansion agenda with groundbreaking at our previously announced $2.5 billion parenteral manufacturing site in Germany
Deliver Revenue Growth
- Revenue grew 26% in Q1 driven by Mounjaro®, Zepbound®, Verzenio®, and Jardiance®1
- New Product2 revenue grew by $1.79 billion to $2.39 billion in Q1
Speed Life-Changing Medicines
- Announced positive topline results for tirzepatide in moderate- to-severe obstructive sleep apnea and obesity
- Received approval of the multi-dose KwikPen® delivery device for Mounjaro in the EU
- Submitted mirikizumab in the U.S. and EU for moderately to severely active Crohn's disease
- Resubmitted lebrikizumab in the U.S. for moderate-to-severe atopic dermatitis
- Initiated Phase 3 program for lepodisiran in reducing cardiovascular risk
Return Capital to Shareholders:
Distributed over $1 billion via dividends in Q1
- Jardiance is part of the Boehringer Ingelheim and Lilly Alliance, and Boehringer Ingelheim holds the marketing authorization for Jardiance
- Refer to slide 8 for a list of New Products
Not for promotional use | 2024 Q1 EARNINGS | 4 |
Key Events Since Last Earnings Call
Regulatory
- Submitted mirikizumab in the U.S. and EU for moderately to severely active Crohn's disease
- Resubmitted lebrikizumab in the U.S. for moderate-to-severe atopic dermatitis
- Announced that the U.S. Food and Drug Administration plans to convene an Advisory Committee meeting to discuss the Phase 3 TRAILBLAZER-ALZ 2 trial of donanemab in early symptomatic Alzheimer's disease, which we expect to occur in mid-2024
- Received approval of the multi-dose KwikPen® delivery device for Mounjaro in the EU with expected launch in the first EU market in the coming weeks
Clinical
- Announced positive topline results of the SURMOUNT-OSA Phase 3 clinical trials showing tirzepatide achieved a mean AHI reduction of up to 63% in adults with moderate-to-severe OSA and obesity compared to placebo
- Announced results from Phase 3 EMPACT-MI trial of Jardiance1 on risk of heart failure hospitalization and death in adults following a heart attack
Clinical (Cont)
- Presented results from a study of lebrikizumab in people with skin of color and atopic dermatitis
- Terminated the Phase 3 CYCLONE-3 trial evaluating Verzenio in metastatic hormone-sensitive prostate cancer for futility following an interim analysis
- Presented preclinical data for agents in our oncology pipeline targeting Nectin-4, KRAS G12D, and BRM (SMARCA2)
Other
- Announced an agreement to acquire an injectable medicine manufacturing facility from Nexus Pharmaceuticals in Pleasant Prairie, Wisconsin. This state- of-the-artfacility is FDA approved, and we are targeting to initiate production at the end of 2025
- Initiated groundbreaking on our previously-announced $2.5 billion parenteral manufacturing site in Alzey, Germany
AHI = Apnea-hypopnea index; OSA = obstructive sleep apnea
1 Jardiance is part of the company's alliance with Boehringer Ingelheim. Lilly reports as revenue royalties received on net sales of Jardiance.
Not for promotional use | 2024 Q1 EARNINGS | 5 |
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information; Certain Line Items (Unaudited)
Dollars in millions; except per share data | Q1 2024 | |||||||
GAAP Reported | Adjustments | Non-GAAP Adjusted | YoY Non-GAAP | |||||
Adjusted Change | ||||||||
TOTAL REVENUE | $8,768 | $ - | $8,768 | 26% | ||||
GROSS MARGIN | 80.9% | 1.6pp | 82.5% | 4.1pp | ||||
TOTAL OPERATING EXPENSE | $4,586 | $ - | $4,586 | 19% | ||||
OPERATING INCOME | $2,509 | $139 | $2,648 | 63% | ||||
OPERATING MARGIN | 28.6% | 1.6pp | 30.2% | 6.9pp | ||||
OTHER INCOME (EXPENSE) | $27 | $(23) | $4 | (94)% | ||||
EFFECTIVE TAX RATE | 11.6% | 0.3pp | 11.9% | (0.9)pp | ||||
NET INCOME | $2,243 | $92 | $2,335 | 60% | ||||
EPS | $2.48 | $0.10 | $2.58 | 59% | ||||
Acquired IPR&D Charges per share* | $0.10 | $ - | $0.10 | $- | ||||
*Acquired IPR&D (in-process research and development) of $111 million (pre-tax) Numbers may not add due to rounding; see slide 23 for a complete list of adjustments
Not for promotional use
2024 Q1 EARNINGS | 6 |
Price/Rate/Volume Effect on Revenue
Dollars in millions
Q1 2024
Amount | Price | FX Rate | Volume | Total | CER |
U.S. | $5,694 | 16% | - | 12% | 28% | 28% |
EUROPE | 1,441 | 1% | 3% | 28% | 32% | 29% |
JAPAN | 364 | (5)% | (8)% | 7% | (6)% | 2% |
CHINA | 376 | (4)% | (3)% | 8% | 1% | 4% |
REST OF WORLD | 893 | (0)% | 1% | 32% | 33% | 31% |
TOTAL REVENUE | $8,768 | 10% | (0)% | 16% | 26% | 26% |
Numbers may not add due to rounding
Not for promotional use
2024 Q1 EARNINGS
CER = price change + volume change
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Q1 2024 Update on Select Products
Millions | ||||||||||||
$8,000 | ||||||||||||
$7,000 | ||||||||||||
$6,000 | ||||||||||||
$5,000 | ||||||||||||
$4,000 | ||||||||||||
$3,000 | ||||||||||||
$2,000 | ||||||||||||
$1,000 | ||||||||||||
$0 | ||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
2021 | 2022 | 2023 | 2024 | |||||||||
New Products: Ebglyss®, Jaypirca®, Mounjaro, Omvoh®, and Zepbound | ||||||||||||
Growth Products: Cyramza®, Emgality®, Jardiance1, Olumiant®, Retevmo®, Taltz®, Trulicity®, Tyvyt®, and Verzenio |
1 Jardiance is part of the company's alliance with Boehringer Ingelheim. Lilly reports as revenue royalties received on net sales of Jardiance.
Not for promotional use | 2024 Q1 EARNINGS |
NEW PRODUCTS
MOUNJARO
- U.S. T2D injectable incretins TRx SOM over 24% and NBRx SOM nearly 30% at end of Q1 2024
ZEPBOUND
- U.S. branded anti-obesity rolling 4-week TRx SOM nearly 40% and rolling 4-week NBRx SOM nearly 57% at end of Q1 2024
JAYPIRCA
- Q1 2024 sales increased to $50 million, representing an acceleration in sequential quarterly growth following the Q4 2023 approval in CLL
OMVOH
- Japan and EU approval in H1 2023; U.S. approval and launch in Q4 2023
GROWTH PRODUCTS
JARDIANCE1
- SGLT2 market leader in several key countries with U.S. TRx SOM over 63% at end of Q1 2024
- U.S. TRx grew over 24% vs. Q1 2023
TALTZ
- U.S. immunology TRx SOM of nearly 6% at end of Q1 2024
- U.S. TRx grew 8% vs. Q1 2023
TRULICITY
-
U.S. T2D injectable incretins TRx SOM of 19% at end of Q1 2024
VERZENIO - U.S. TRx grew over 32% vs. Q1 2023
• Strong uptake in adjuvant breast cancer indication | 8 |
Zepbound U.S. Launch Progress
Exceptionally strong launch progress since U.S. FDA approval on November 8, 2023
v We are rapidly building access in the U.S. and, as of April 1, we have approximately 67% access in commercial
v Continued focus on broadening formulary access and through employer opt-ins;early progress is encouraging
Not for promotional use | 2024 Q1 EARNINGS | 9 |
Capital Allocation
$ in Billions
Growth
Return
Q1 2024 Capital Allocation
R&D*
Capital
Investments
Business
Development**
Dividend
Share
Repurchase
- After tax
- Includes development milestones, closed acquisitions and cash outflows associated with equity investments
Not for promotional use | 2024 Q1 EARNINGS | 10 |
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Disclaimer
Eli Lilly and Company published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 10:58:50 UTC.
