Covid-19 boost helps Eli Lilly beat forecasts

Covid-19 helped bolster Eli Lilly’s first-quarter revenues by $250m, the US drugs giant said on Thursday.

Total revenues rose 15% to $5.86bn in the three months to March end, ahead of most analyst forecasts for around $5.51bn, driven by 22% volume growth.

“Strong underlying demand for key growth products was augmented by approximately $250m of additional revenue due to increased customer buying patterns and patient prescription trends due to the Covid-19 pandemic,” Eli Lilly told investors.

This included patients stockpiling blockbuster treatments such as Trulicity following stay-at-home orders. The diabetes drug saw revenues surge 40% during the quarter, to $1.23bn.

On a reported basis, earnings per share fell 63% to $1.60, reflecting an exceptional gain a year earlier following the disposal of Elanco Animal Health. On a non-GAAP basis, EPS rose 32% to $1.75.

Josh Smiley, chief financial officer, said: “Lilly exited 2019 with strong revenue growth and margin expansion, driven by the uptake of our newer medicines. That momentum continued in the first quarter, and was augmented by the higher potential supply chain purchasing due to the Covid-19 pandemic.”

Looking forward, and Eli Lilly has widened its EPS guidance for the full-year. It now expects it to become in between $6.20 and $6.40 on a reported basis and $6.70 and $6.90 on a non-GAAP basis, a 10% increase on the top end.

Said Smiley: “Our revenue and operating margin outlook for 2020 is unchanged, but the economic and healthcare consequences of this pandemic are uncertain, and could negatively affect our financial results later in 2020 and beyond, due to reduced non-Covid healthcare activities and global economic challenges.

“We are therefore widening the rage of 2020 EPS guidance, to reflect both our underlying strong performance as well as future uncertainty. However, the long-term fundamentals of our business remain strong.”

Eli Lilly, along with most pharmaceutical and biotech companies around the world, is working on developing treatments for Covid-19. With partner AbCellera, it is developing antibody products for both the treatment and prevention of the virus, and also testing the efficacy of drugs developed for other illness in treating Covid-19.

David Ricks, chairman and chief executive, said: “Lilly is rising to meet the challenges of the Covid-19 pandemic, whether it be by supporting…patients with chronic diseases who are the most vulnerable to the virus, or directly attacking the disease with new and existing therapies.

“We’re focused on reliably supplying medicines, keeping our employees safe and pushing scientific efforts at top speed to defeat Covid-19. We’re also committed to improving the affordability of and access to our medicines, particularly insulin, during these challenging times.”