Eli Lilly (LLY) reported significantly better-than-expected results on Thursday. Sales were 13 percent above Wall Street estimates of $11.3 billion for the second quarter.

That’s a 36% jump in sales from a year ago, driven largely by GLP-1 drugs Mounjaro and Zepbound, which together sold $4.3 billion, compared to Wall Street consensus of $3.2 billion. The sales increase comes just as the U.S. Food and Drug Administration removed both drugs from its shortage list – a sign that Lilly’s supply constraints have eased.

As a result, Lilly raised its full-year guidance for the second time this year – a $5 billion increase after first setting the bar at $40.4 billion to $41.6 billion for the end of 2023. The forecast is now $45.4 billion to $46.6 billion for the year.

Following the news, shares rose more than 10% on Thursday morning.

Jared Holz, a healthcare expert at Mizuho, ​​said in a statement on Thursday that the exceeded results should allay any concerns about the speed of distribution of the drugs.

“We believe many investors entered this quarter with caution or a bias toward short positions given expectations/valuations, but it is incredibly rare to see such stellar results from a major pharmaceutical company as we are seeing here at LLY this morning,” Holz said.

Future outlook

In addition to the continued demand for GLP-1, Lilly is also focused on advancing a pill form (orforglipron) of the drug in clinical trials and finding additional use cases for the existing drugs, which would lead to greater acceptance and sales of the injectable drugs.

Lilly said it has already submitted an application for use of Zepbound to treat sleep apnea in the U.S. Additional uses for Lilly and Novo’s GLP-1 will open the door to greater insurance coverage, as many large payers still do not cover the drugs for weight loss alone.

JPMorgan analyst Chris Schott said in a note on Thursday that the story is not a one-off success for Lilly.

“LLY remains one of our favorites in the group as we expect further upside to Wall Street estimates given increasing injectable capacity, the launch of orforglipron and outcomes data supporting broad use of anti-obesity drugs,” Schott said.

Anjalee Khemlani is the senior health reporter at Yahoo Finance and covers all things related to pharma, insurance, care services, digital health, PBMs, and health policy and policy. Follow Anjalee on all social media platforms @AnjKhem.

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