Eli Lilly's Obesity Drug Sales Boost Earnings, Driving Positive Outlook for 2025

Eli Lilly, the Indianapolis-based pharmaceutical giant, has reported a substantial increase in profits for the fourth quarter of 2024, driven largely by the success of its diabetes and obesity medications. The company's financial results have exceeded Wall Street expectations, providing a reassuring signal to investors following concerns about overestimated demand earlier in the year.

Strong Financial Performance and Market Response

Eli Lilly's net income for the fourth quarter doubled to $4.4 billion, or $4.88 per share, up from $2.2 billion, or $2.42 per share, in the same period the previous year. On a non-GAAP basis, earnings reached $4.81 billion, or $5.32 per share, surpassing analyst expectations of $5.11 per share.

The company's positive financial outlook for 2025 has been well-received by investors. Lilly projects non-GAAP earnings of $22.50 to $24 per share for the full year, meeting or exceeding analyst forecasts. This optimistic guidance led to a nearly 5% increase in Lilly's share price, reaching around $881 in midday trading following the announcement.

Diabetes and Obesity Drug Sales Surge

The primary drivers of Lilly's impressive financial results were its diabetes and obesity medications. Sales of Mounjaro, the company's diabetes drug, increased by 60% in the fourth quarter to $3.5 billion. Meanwhile, Zepbound, Lilly's newer obesity medication, generated $1.9 billion in revenue, a significant jump from $175.8 million in the fourth quarter of 2023.

CEO Dave Ricks emphasized the rapid growth of the incretin drug market, stating, "We believe both products are still very early in their launch cycle." Lilly is actively working to capture market share from competitor Novo Nordisk in the obesity sector, bolstered by recent clinical trial results showing Zepbound's superior weight loss efficacy compared to Novo's Wegovy.

Manufacturing Expansion and Future Outlook

To meet the growing demand for its incretin drugs, Eli Lilly has made substantial investments in manufacturing capabilities. The company expects to increase its production capacity for these medications by at least 60% in the first half of 2025 compared to the same period in the previous year.

For the full year 2025, Lilly has maintained its overall revenue guidance of between $58 billion and $61 billion. This projection, combined with the company's manufacturing expansion plans, suggests continued confidence in the growth potential of its diabetes and obesity drug portfolio.