BIG PHARMA EARNINGS WATCH: ELI LILLY

Brand Name Drug Company Sees Soaring Profits After Hiking Prices

Today, brand name drug giant Eli Lilly announced rising profits for the fourth quarter of 2020 – topping analysts’ expectations.

• The company clocked $7.44 billion in revenue for Q4 – surpassing analysts’ expectations.
• Stock for Eli Lilly surged to a ‘record high’ driven by strong sales of cancer drug Alimta and top-selling diabetes drug Trulicity.
• Sales of Trulicity rose 24 percent to $1.50 billion, beating estimates of $1.39 billion. Sales of Alimta grew 23 percent to $652.7 million, trouncing estimates of $560 million.

• Eli Lilly rang in the new year with over one dozen price hikes.
• In the first week of July, Eli Lilly was among Big Pharma giants that announced new price hikes despite the unprecedented economic uncertainty facing millions of Americans grappling with the pandemic.
• This past summer, Eli Lilly increased the price of two of its cancer drugs – Cyramza and Alimta.
• In 2020, Eli Lilly increased prices over a dozen times – including top-selling diabetes drug Trulicity.

• Over The Past Decade, The Three Largest Manufacturers Of Insulin – Novo Nordisk, Sanofi And Eli Lilly – “Aggressively Raised The List Price Of Their Insulin Products Absent Significant Advances In The Efficacy Of The Drugs.” “Sanofi’s long-acting insulin pens, Lantus SoloStar, increased from $303 in 2014 to $404 in 2019. The WAC price of Novo Nordisk’s long-acting insulin pens, Levemir FlexTouch, increased from $303 in May 2014 to approximately $462 in January 2019, representing an increase of $159—or 52%— in a little more than five years. Eli Lilly’s rapid-acting insulin, Humalog 50-50 Kwikpen, had a WAC of $530 in 2017 compared to $323 in 2013—an increase of $207 or 64% in four years. Sanofi’s rapid acting insulin, Apidra Solostar, also increased—from $302 in 2014 to $521 in 2019— while Novo Nordisk’s rapid-acting insulin, Novolog FlexPen, rose from $324 in 2013 to $558 in 2018, representing a more than 70% WAC price hike for both companies during this time period.” (Staff Report, “Insulin: Examining The Factors Driving The Rising Cost Of A Century Old Drug,” United States Senate Finance Committee, 1/14/21)
• Insulin R&D Spending Was A Fraction Of Manufacturers’ Revenue And Sales And Marketing Expenses. “Eli Lilly reported spending $395 million on R&D costs for Humalog, Humulin, and Basaglar between 2014 and 2018, during which time the company spent nearly $1.5 billion on sales and marketing expenses for its insulins. These three drugs generated $22.4 billion in revenue during that period. Similarly, Sanofi reported net sales of nearly ‚Ǩ31 billion (approximately $37 billion based on current currency conversion rates)5 between 2014 and 2018 for its five insulin products, during which time the company reported spending $902 million on insulin R&D. Novo Nordisk failed to provide requested R&D spending information to the Committee.” (Staff Report, “Insulin: Examining The Factors Driving The Rising Cost Of A Century Old Drug,” United States Senate Finance Committee, 1/14/21)

Follow along as we continue to monitor fourth quarter earnings announcements from brand name drug companies. Check out the key takeaways from Q4 earnings calls from Johnson & Johnson and Novartis HERE.