What You Need To Know Ahead of Eli Lilly's Earnings Report

Eli Lilly (LLY) reports earnings before the bell Tuesday, with investors and analysts watching to see how much weight-loss drugs are continuing to drive the company's growth.

Analysts expect the drugmaker's financial performance to substantially improve from the first quarter of last year, with weight-loss drugs like Eli Lilly's Zepbound and Mounjaro likely driving momentum for both the financials as well as the stock price. Similar to the optimism around Ozempic and Wegovy-maker Novo Nordisk (NVO).

Eli Lilly is expected to report a 26% year-over-year increase in revenue to $8.79 billion. Net income likely jumped to $2.11 billion, or $2.34 a share, compared to $1.34 billion or $1.49 per share in the same period last year.

Key Metric: New Products Revenue

The weight-loss drugs were the biggest driver of Eli Lilly's revenue in the fourth quarter, with Mounjaro accounting for $2.21 billion, with Zepbound generating just $175.8 million in its first quarter on the market. Combined, the two weight-loss drugs made up just over a quarter of Eli Lilly's total fourth quarter revenue of $9.35 billion.

The company said it expected 2024 revenue to be "largely driven" by the New Products segment, including Zepbound. After fourth-quarter revenue jumped 28%, the company projected that its sales could increase more than 20% in 2024.

New products revenue, which includes Zepbound and Mounjaro, along with leukemia drug Jaypirca, ulcerative colitis drug Omvoh, and eczema drug Ebglyss, stood at $2.49 billion in the fourth quarter.

Business Spotlight: Weight-Loss Drugs, Amazon Partnership

After receiving Food and Drug Administration (FDA) approval for Zepbound in November, Eli Lilly said in its February earnings call that demand for the weight-loss drug, along with the other drug with the same active ingredient called Mounajro, still could outpace supply in 2024 as the company works to increase production.

The spike in demand for the drugs has had some drawbacks, as it has also forced Eli Lilly into legal battles, suing a number of businesses last year for allegedly selling counterfeit versions of Mounjaro.

While it may not have a substantial impact on the company's earnings, Eli Lilly could give an update on its partnership with Amazon (AMZN) that the companies announced last month. Eli Lilly's drugs that treat obesity, diabetes, migraines, and more are eligible to be shipped through Amazon's digital pharmacy.

Because the partnership was announced just weeks before the first quarter ended, it may have only minimal impact on the first-quarter earnings, but Eli Lilly executives could provide updates on the outlook for its broader digital pharmacy efforts that include details about the Amazon partnership.

The demand for weight-loss drugs has helped drive the company's stock price up over 81% in the last year, with shares closing at $737.20 Monday.

UPDATE—April 29, 2024: This article has been updated to reflect more recent analyst estimates and share price information.