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Jun 30, 2020
Eli Lilly Q2 2020 Earnings Report
Eli Lilly's financial results reflected variability caused by the COVID-19 pandemic, but underlying business fundamentals remained strong.
Key Takeaways
Eli Lilly reported a 2% decrease in revenue for Q2 2020, impacted by lower realized prices and the COVID-19 pandemic. Despite this, the company achieved several R&D milestones and raised EPS guidance for the year.
Revenue declined 2 percent, with volume growth of 6 percent offset by price decreases and foreign exchange impacts.
COVID-19 pandemic negatively impacted Q2 revenue by approximately $500 million due to decreased customer buying and delayed new patient prescription trends.
Operating expenses decreased 5 percent, driven by lower marketing expenses.
EPS increased to $1.55 on a reported basis and $1.89 on a non-GAAP basis.
Eli Lilly
Eli Lilly
Eli Lilly Revenue by Segment
Eli Lilly Revenue by Geographic Location
Revenue by Segment
Verzenio Revenue
CapyFin.comRevenue by Geographic Location
U.S. Revenue
CapyFin.comOutside U.S. Revenue
CapyFin.com Forward Guidance
Eli Lilly updated its 2020 financial guidance, anticipating revenue between $23.7 billion and $24.2 billion and raising EPS guidance to $6.48 to $6.68 on a reported basis and $7.20 to $7.40 on a non-GAAP basis.
Positive Outlook
- Healthcare activity will align more closely with historical levels in the second half of 2020.
- New-to-brand prescription trends will improve in the U.S.
- Promotional spend will constitute a mix of in-person customer interactions, direct-to-consumer advertising and investments in digital promotion.
- Clinical trial enrollment in existing studies, as well as initiation of new clinical trials, will resume in the second half of 2020.
- Investment in COVID-19 related research, testing and support will continue throughout 2020.
Challenges Ahead
- Uncertainty surrounds the extent and duration of the impact of the COVID-19 pandemic.
- Increased utilization of patient affordability programs and changes in segment mix due to higher U.S. unemployment will have a modestly negative impact U.S. pricing.
- Revenue growth is expected to be partially offset by lower revenue for products that have lost patent exclusivity.
- Revenue growth is also expected to be partially offset by a mid-single digit net price decline in the U.S.
- Net price declines in China, Japan and Europe.