Eli Lilly Q1 2021 Earnings Report
Key Takeaways
Eli Lilly's Q1 2021 revenue increased by 16%, driven by volume growth and key products like Trulicity and Verzenio. The company achieved significant progress in R&D, including positive data readouts for tirzepatide and donanemab. EPS decreased on a reported basis but increased on a non-GAAP basis. The 2021 EPS guidance was lowered on a reported basis and adjusted on a non-GAAP basis.
Revenue increased by 16% driven by volume growth of 17%.
Key growth products contributed 8 percentage points of revenue growth, representing approximately 46% of total revenue.
Operating expenses increased by 11%, driven by higher research and development investments, including expenses for COVID-19 therapies.
The FDA granted Emergency Use Authorization for bamlanivimab and etesevimab together for the treatment of COVID-19.
Eli Lilly
Eli Lilly
Eli Lilly Revenue by Segment
Eli Lilly Revenue by Geographic Location
Forward Guidance
Eli Lilly updated its 2021 financial guidance with revenue expected between $26.6 billion and $27.6 billion. Earnings per share are projected to be in the range of $7.03 to $7.23 on a reported basis and $7.80 to $8.00 on a non-GAAP basis.
Positive Outlook
- Revenue growth is expected to be driven by volume from key growth products, including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, Cyramza, Emgality, Tyvyt and Retevmo, as well as by COVID-19 therapies.
- Gross margin as a percent of revenue for 2021 is still expected to be approximately 77% on a reported basis and approximately 79% on a non-GAAP basis.
- The company expects low-to-mid-single digit net price declines in the U.S., driven primarily by increased rebates to maintain broad commercial access and segment mix, partially offset by lower utilization in the 340B segment.
- Other income (expense) for 2021 is now expected to be income in the range of $150 million to $250 million on a reported basis
- The 2021 effective tax rate is now expected to be approximately 13 percent on both a reported basis and a non-GAAP basis.
Challenges Ahead
- Revenue growth is expected to be partially offset by lower revenue for products that have lost patent exclusivity.
- The company expects mid-single digit net price declines globally in 2021.
- Outside the U.S., the company expects net price declines in China, Japan, and Europe.
- Research and development expenses for 2021 are now expected to be in the range of $6.9 billion to $7.1 billion, reflecting additional investments in potential therapies for Alzheimer's disease and approximately $400 million to $500 million of continued investment in COVID-19 therapies.
- Other income (expense) for 2021 is expense in the range of $100 million to $200 million on a non-GAAP basis.
Revenue & Expenses
Visualization of income flow from segment revenue to net income