Eli Lilly and Company
"Take what you find here and make it better and better." - Colonel Eli Lilly
Eli Lilly and Co (Lilly) is an American pharmaceutical company.
They discover, develop, manufacture, and market products in a single business segment — human pharmaceutical products.
Most of the products they sell today were discovered or developed by their own scientists, and their long-term success depends on their ability to continually discover or acquire, develop, and commercialize innovative new medicines.
They manufacture and distribute their products through facilities in the United States (U.S.), including Puerto Rico, and 7 other countries. Their products are sold in approximately 120 countries and their clinical research is conducted in more than 55 countries around the world.
Employees: 38,000
Revenue: $28.541B for FY2022
HQ Location: Indianapolis, Indiana, U.S.A.
What they do:
They pursue pharmaceutical innovation
Provide high-quality products
Strive to deliver superior business results
The company offers medicines for cardiovascular conditions, diabetes, endocrinology, cancer, neurological problems, immune disorders, men's health, and musculoskeletal problems.
Their products include:
Diabetic products - Basaglar®, Humalog®,Humulin® , Humulin 70/30, Humulin N, Humulin R, and Humulin U-500, Jardiance® ,Trajenta®, Trulicity
Oncology (cancer) products - Alimta®, Cyramza®, Erbitux®, Retevmo®, Tyvyt®, Verzenio®
Immunology (vaccine) products - Olumiant®, Baricitinib, Taltz®
Neuroscience (brain-related) products - Cymbalta ®, Emgality®, Zyprexa®
Other therapies - such as treatments for Covid-19, treatments for erectile dysfunction, benign prostatic hyperplasia, and treatment of osteoporosis in postmenopausal women and men at high risk for fracture and glucocorticoid-induced osteoporosis in men
The company distributes its pharmaceutical health products through independent wholesale distributors.
Lilly conducts research and development activities to discover and deliver innovative medicines.
It also promotes products through sales representatives and marketing agreements with other pharmaceutical companies.
Their purpose:
Lilly unites caring with discovery to create medicines that make life better for people around the world.
They have 3 core values:
Integrity
Excellence
Respect for people
Business Goals:
To improve access to quality healthcare for 30 million people living in limited resource settings annually by 2030
With continued growth in Mounjaro and their key products, including Verzenio, Jardiance, and Taltz, they expect their core business revenue to grow by mid-teens in 2023.
They believe they are well-positioned to deliver top-tier revenue growth through at least 2030 and to deliver on Lilly's mission to make life better for people around the world.
Things to know right now
New jobs to be created in manufacturing expansion
They have plans in place to invest an additional $450 million and create at least 100 new jobs to expand manufacturing capacity at the company's Research Triangle Park facility
Acquisition of Akouos
This acquisition will expand Lilly's efforts in genetic medicine to include Akouos's potential first-in-class adeno-associated viral gene therapies.
Collaboration with Eva Pharma
Lilly has collaborated with EVA Pharma to establish local manufacturing capabilities to supply low-cost insulin to at least 1 million people living with diabetes by 2030, mostly in Africa. This is an important collaboration with a local company to produce low-cost, high-quality medicines.
Initiative with Direct Relief
Lilly’s initiative with Direct Relief plans to expand cold chain capacity in Africa, Latin America, the Caribbean, and Southeast Asia.
Business Segment:
They only discover, develop, manufacture, and market products in a single business segment:
Human Pharmaceutical Products
The Human Pharmaceuticals product segment is a prescription medicine segment that focuses on various therapeutic areas through its info related to Diabetes, Oncology, Cardiovascular, and Respiratory portfolios.
Competition:
Important competitive factors include effectiveness, safety, and ease of use; formulary placement, price, and demonstrated cost-effectiveness; marketing effectiveness; and research and development of new products, processes, modalities, and uses.
They believe their long-term competitive success depends on discovering and developing (either alone or in collaboration with others) or acquiring innovative, cost-effective products that provide improved outcomes for patients and deliver value to payers, and continuously improving the productivity of their operations in a highly competitive environment.
Their Competitors:
Bristol Myers Squid
GSK
Merck
Pfizer
Their financial calendar
Q4: October-December - Earnings 2nd February 2023
Q1: January-March - Earnings 27th April 2023
Q2: April-June - Earnings 8th August 2023
Q3: July-September - Earnings 31st October 2023
Next Earnings Report:
27th April 2023
Progress made during 2022:
They delivered strong revenue growth in their core business propelled by their key growth products.
They launched Mounjaro for patients with Type 2 diabetes while advancing and expanding their development program for Tirzepatide, including the start of the SURMOUNT-MMO outcome study and the initiation of a rolling submission for chronic weight management.
They submitted regulatory applications for important pipeline products like Mirikizumab, Pirtobrutinib, and Lebrikizumab.
They have already received approval for Jaypirca and are poised to advance Donanemab in the regulatory process, assuming positive data from the TRAILBLAZER-ALZ 2 phase 3 study.
They continue to invest in their pipeline, their capacity, their capabilities, and their people.
They returned $5 billion to shareholders via the dividend and share repurchases
They announced a 15% dividend increase for 2023.
Positives from the last earnings report:
There was a 10% growth for their core business in Q4 on a constant currency basis, driven by strong volume growth.
Excluding COVID-19 antibodies, revenue in Q4 2022 increased 5% and total worldwide volume increased 13%.
Key growth products, consisting of Verzenio®, Mounjaro®, Jardiance, Taltz®, Trulicity®, Retevmo®, Emgality®, Cyramza®, Tyvyt® and Olumiant®, grew 21% and represented 70% of revenue for Q4 2022.
Excluding revenue from COVID-19 antibodies, revenue in the U.S. increased by 11%, primarily driven by volume from key growth products.
Challenges from the last earnings report:
In Q4 2022, worldwide revenue was $7.30 billion, a decrease of 9% compared with Q4 2021, driven by a 4% decrease from the unfavorable impact of foreign exchange rates, a 3% decrease due to lower realized prices, and a 2% decrease in volume.
Revenue in the U.S. decreased 10% to $4.66 billion, driven by a 10% decrease in volume with prices remaining relatively flat.
Revenue outside the U.S. decreased 6% to $2.64 billion, driven by a 12% decrease from the unfavorable impact of foreign exchange rates and a 7% decrease due to lower realized prices, partially offset by a 12% increase in volume. The lower realized prices were primarily driven by the impact of government pricing in China from the volume-based procurement (VBP) for Humalog® and the National Reimbursement Drug List (NRDL) formulary for certain products, particularly Verzenio and Tyvyt. The increase in volume outside the U.S. was largely driven by key growth products and approximately $130 million of one-time revenue associated with the sale of the company's rights to Alimta in Korea and Taiwan.
COVID-19 antibody revenue in Q4 2022, which, compared to the prior year, declined 96% from approximately $1.1 billion in Q4 2021 to 38 million in Q4 2022. Bebtelovimab is currently not authorized for emergency use in any U.S. region, and they continue to expect no COVID-19 antibody revenue for 2023.
Risks to the business:
The COVID-19 pandemic has adversely impacted and may continue to adversely impact their business and operations. They are currently unable to predict the full extent to which the COVID-19 pandemic or any future pandemic, epidemic, or similar public health threat will adversely impact our business and operations in the future.
Pharmaceutical research and development is very costly and highly uncertain; and they may not succeed in developing, licensing, or acquiring commercially successful products sufficient in number or value to replace revenues of products that have lost or will soon lose intellectual property protection or are displaced by competing products or therapies.
They depend on products with intellectual property protection for most of their revenues, cash flows, and earnings; they have lost or soon will lose effective intellectual property protection for a number of their products, which has resulted and is likely to continue to result in rapid and severe declines in revenues.
Their long-term success depends on intellectual property protection; if their intellectual property rights are invalidated, circumvented, or weakened, their business will be adversely affected.
Lilly and their products face intense competition from multinational pharmaceutical companies, biotechnology companies, and lower-cost generic and biosimilar manufacturers, and such competition could have a material adverse effect on its business.
Failure, inadequacy, breach of, or unauthorized access to, their IT systems or those of their third-party service providers, unauthorized access to their confidential information, or violations of data protection laws, could each result in material harm to their business and reputation.
Significant economic downturns or international trade and other global disruptions or disputes could adversely affect their business and operating results.
Pharmaceutical products can develop unexpected safety or efficacy concerns, which could have a material adverse effect on their revenues, income, and reputation.
They face litigation and investigations related to their products, how they price their products, and how they commercialize their products; they could face large numbers of claims in the future, which could adversely affect their business, and they are self-insured for such matters.
Manufacturing and supply chain difficulties, disruptions, or shortages could lead to product supply problems.
Reliance on third-party relationships and outsourcing arrangements could adversely affect their business.
Risks Related to Government Regulation
Their business is subject to increasing government price controls and other public and private restrictions on pricing, reimbursement, and access to their drugs, which could have a material adverse effect on their reputation or business.
Changes in foreign currency rates, interest rate risks or inflation could materially affect their results of operations.
Changes in tax laws or exposure to additional tax liabilities could increase their income taxes and decrease their net income.
Regulatory compliance problems could be damaging to the company.