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(Reuters) – Eli Lilly (NYSE:LLY) on Tuesday raised its annual forecasts after beating estimates for quarterly results, driven by strong demand for its new diabetes drug Mounjaro, ahead of a decision on its use as a weight-loss treatment.
The company is leaning on Mounjaro, approved last May in the U.S. for diabetes, to soften the hit from insulin price cuts and competition for cancer therapy Alimta.
Earlier on Tuesday, rival Novo Nordisk (NYSE:NVO) said its obesity drug Wegovy reduced the risk of a major cardiovascular event like a stroke by 20% in overweight or obese people with a history of heart disease in a closely-watched late-stage study.
“Until now, these medicines were only weight-loss drugs but now they are much more than that,” said Wells Fargo (NYSE:WFC) analyst Mohit Bansal.
Mounjaro, or tirzepatide, like Wegovy, also targets the GLP-1 hormone and has shown to help people with type 2 diabetes who were also obese or overweight to lose nearly 16% of their body weight.
Lilly’s shares extended gains from the data to be up nearly 9% in premarket trading after the results.
A decision on Mounjaro to treat obesity, expected later this year, could help the drugmaker tap a multi-billion dollar market.
Lilly is also betting on the success of its Alzheimer’s drug candidate, donanemab, which could be the third in its class on the market if approved in the U.S. A decision on donanemab is also expected by the end of this year.
The company now expects adjusted 2023 earnings of $9.70 to $9.90 per share, compared with its prior forecast of $8.65 to $8.85.
Mounjaro generated quarterly sales of $979.7 million, compared with estimates of $743 million.
Lilly now expects annual revenue in range of $33.4 billion to $33.9 billion, compared with its prior range of $31.2 billion to $31.7 billion.
Excluding items, the drugmaker earned $2.11 per share in the quarter ended June 30, above analysts’ average estimate of $1.98.
Overall revenue of $8.31 billion for the second quarter also beat estimates of $7.58 billion.
