Investors respond positively to “strong” Eli Lilly results

Shares in Indianapolis-based Ely Lilly and Company rose to a 52-week high despite missing its profit expectations. The company delivered earnings of $1.87 per share, slightly lower than the $1.89 per share prediction.

“We delivered strong performance this quarter, with volume-driven growth across our core business and most major geographies,” said David Ricks, Lilly's chairman and CEO.

Revenue in the second quarter was $6.74bn, up by 23% from the same period last year, largely driven by volume growth. However, sales of its COVID-19 antibodies fell sharply to $149m, down from $810m in the first quarter of 2021.

While revenue growth in the US was strong at 18% ($3.704bn), the company performed better outside the US with revenues rising by 29% to $3.036bn.

Drivers of growth included blockbuster diabetes drug Trulicity, for which revenue rose by 25% to $1.54bn, in line with estimates, and psoriasis drug Taltz which exceeded market expectations with worldwide revenue increasing by 44% to $569m.

Analysts are crediting the rise in the company’s share price to the announcement that it will submit donanemab for Alzheimer's disease and tirzepatide for type 2 diabetes to regulatory authorities by the end of 2021.

The focus on donanemab comes after the controversial authorisation of Biogen’s Alzheimer’s drug, aducanumab in June. The drug was the first treatment to target the likely cause of the disease.

At the time, the decision by the FDA was criticised for the use of biomarker rather than clinical data, with one member of the FDA advisory committee commenting that “it's hard to find a scientist who believes the totality of the evidence is persuasive”.

Speaking to investors last week, chief scientific and medical officer at Lilly, Daniel Skovronsky, discussed the controversy. “The first amyloid-long agent for the treatment of Alzheimer's disease was approved under the FDA's accelerated approval pathway, based on plaque lowering, which we believe reflects a shift in policy and sets a new path for Alzheimer's drug approval in the US.”

He said that Lilly had “long been an advocate” for the use of amyloid plaque and neurofibrillary tangles as biomarkers, adding that their data suggests donanemab clears plaque “faster and deeper” than other therapies.

“There will be some physicians who still say: ‘I don't want to use a drug until I have cognitive data.’ For those physicians who are willing to make that link between the surrogate efficacy data and the phase 2 data on donanemab, if you believe that lowering amyloid plaque is a good thing to do, you're going to want the drug that lowers plaque the most,” said Skovronsky.