Eli Lilly Reports Q3 Global Revenue of $5.741 Billion and Halts Hospitalized Patient Trial for COVID-19 Antibody Therapy

Compiled by Hemingway and Fan Dongdong

On October 27, Eli Lilly announced its third-quarter financial report. The report showed that Eli Lilly's total global revenue in the third quarter was $5.741 billion, a year-on-year increase of 5%. Key growth products launched since 2014, such as Taltz, empagliflozin, and ramucirumab, contributed nearly 9 percentage points to revenue growth, accounting for approximately 52% of the total revenue for the quarter.

Revenue in the U.S. market increased by 3% to $3.161 billion, primarily driven by a 7% increase in volume revenue, which partially offset a 4% decline due to lower real prices. Revenue outside the U.S. grew by 7% to $2.579 billion, mainly attributable to a 12% increase in volume revenue and a 1% favorable impact from foreign exchange rates, which partially offset a 7% decline caused by lower real prices.

The growth in sales revenue was primarily driven by the inclusion of Tyvyt and Alimta in China’s National Reimbursement Drug List (NRDL), as well as increased sales volumes of key growth products in major international markets, including dulaglutide, Olumiant, and empagliflozin. The decline in net selling prices was mainly attributable to price reductions for Tyvyt and Alimta under China’s NRDL and the biennial mandatory price cuts imposed by the Japanese government.

Compared with the third quarter of 2019, gross profit for the current quarter increased by 3%, reaching $4.414 billion, while the gross margin was 76.9%, representing a year-over-year decrease of 1.6 percentage points. The decline in gross margin was primarily attributable to the adverse impact of foreign exchange rates on international inventory sold, higher amortization of Retevmo-related intangible assets, and price reductions for certain products.

Total operating expenses in the third quarter of 2020 increased by 9%, with the sum of research and development (R&D), marketing, sales, and administrative expenses reaching $3.035 billion. R&D expenses rose by 6% year-over-year to $1.465 billion, accounting for 25.5% of revenue, primarily driven by approximately $125 million in higher development costs for COVID-19 antibody therapies and baricitinib. Marketing, sales, and administrative expenses increased by 11% to $1.569 billion, mainly due to increased marketing expenditures for key growth products, reflecting heightened promotional efforts targeting physicians and consumers as global healthcare product utilization improved.

In the third quarter of 2020, net income and earnings per share were $1.1208 billion and $1.33, respectively, compared to $1.254 billion and $1.37 in the third quarter of 2019, primarily due to lower operating income and higher income tax expenses.

In the first nine months of 2020, global revenue increased by 6% to $17.1 billion, compared to $16.206 billion in the same period of 2019. The growth was primarily driven by a 12% increase in sales volume, which was partially offset by a 6% decline due to price reductions.

Net income and earnings per share for the first nine months of 2020 were $4.077 billion and $4.47, respectively, compared to $6.823 billion and $7.24 in the same period of 2019. The primary reason for the decline was a capital gain of approximately $3.7 billion from the sale of Elanco in 2019.

Key Events in the Past Three Months

Regulatory

The FDA approved two additional doses of dulaglutide, so the company expanded the label for dulaglutide to include 3.0 mg and 4.5 mg doses during commercialization.

European Commission Approves Olumiant for Systemic Treatment of Adults with Moderate-to-Severe Atopic Dermatitis (AD)

Clinical

The Company presented additional data on Verzenio at the ESMO 2020 virtual congress. In patients with high-risk, early-stage HR+/HER2- breast cancer, Verzenio in combination with endocrine therapy (ET) significantly reduced the risk of breast cancer recurrence by 25% compared to standard adjuvant ET alone.

Business Development and Others

Eli Lilly Adds Insulin Affordability Program to Its Comprehensive Payment Solutions for U.S. Patients with Diabetes, Featuring a $35 Copay Card. Regardless of whether patients have commercial insurance, they can purchase Eli Lilly’s insulin for $35 per month through this program.

Eli Lilly and Innovent Announce Global Expansion Plan for Strategic Alliance on Tyvyt. Eli Lilly and Innovent are currently co-commercializing Tyvyt in China. Under the expanded licensing agreement, Eli Lilly will obtain exclusive rights to Tyvyt outside of China and plans to pursue its registration in the United States and other markets. In return, Innovent will receive a $200 million upfront payment, up to $825 million in potential development and commercialization milestone payments, as well as double-digit percentage royalties on net sales.

The Company Announced the Final Agreement to Acquire Disarm Therapeutics. Disarm Therapeutics is a private biotechnology company that has developed a novel disease-modifying therapy for patients with axonal degeneration.

Additionally, prior to the release of Eli Lilly’s earnings report, the U.S. National Institutes of Health (NIH) suspended a clinical trial of the company’s anti-SARS-CoV-2 antibody in hospitalized COVID-19 patients.

LY-CoV555 is a neutralizing antibody therapy developed by Eli Lilly for COVID-19. Earlier this month, the NIH decided to suspend patient enrollment in the clinical trial after an independent data and safety monitoring board (NIAID) observed differences in clinical status between patients receiving LY-CoV555 (bamlanivimab) and those receiving placebo. On day 5, the differences between the two groups exceeded predefined safety thresholds, and the board recommended halting the trial after reviewing updated data from 326 participants.

The NIH stated that the trial was suspended because “there is a low likelihood of clinical benefit from the LY-CoV555 therapeutic intervention in this hospitalized patient population.” The NIAID noted that bamlanivimab is unlikely to help hospitalized COVID-19 patients recover from the late stages of the disease. Although safety concerns triggered the suspension of the trial, updated data revealed no significant safety differences.

Currently, another patient trial of LY-COV555 targeting early-stage COVID-19 is still ongoing. In mid-September, Eli Lilly announced the interim validation data from the Phase II BLAZE-1 clinical trial of LY-CoV555, which enrolled outpatients with mild to moderate COVID-19. Eli Lilly stated that it remains confident in LY-CoV555’s ability to prevent disease progression in patients with early-stage COVID-19.

As a monoclonal antibody that effectively neutralizes IgG1, LY-CoV555 can directly inhibit the spike protein of the SARS-CoV-2 virus. The design principle of this antibody is to block viral attachment and entry into human cells, thereby neutralizing the virus and demonstrating potential efficacy in the prevention and treatment of COVID-19.

Eli Lilly offered a hypothesis for the trial’s suspension, suggesting that hospitalized patients with advanced COVID-19 had longer infection durations and more severe symptoms, and may have received different treatments. Due to these factors, hospitalized patients might not benefit from neutralizing antibodies, as they may have already developed their own endogenous antibody response and entered a disease stage characterized by virus-induced inflammatory responses, whereas the function of the neutralizing antibody LY-CoV555 is merely to supplement the patient’s own immune system.

According to Eli Lilly’s third-quarter financial report, additional data from the interim analysis of the BLAZE-1 trial indicated that the combination therapy using Eli Lilly’s two antibodies, LY-CoV555 and etesevimab (LY-CoV016), reduced viral load in patients, improved symptoms, and decreased COVID-related hospitalizations and emergency interventions. Currently, Eli Lilly has initiated the BLAZE-2 trial, a Phase III study evaluating bamlanivimab for the prevention of COVID-19 among residents and staff at long-term care facilities in the United States. Furthermore, the company has entered into a manufacturing collaboration with Amgen to enhance the supply capacity of Eli Lilly’s potential COVID-19 therapies.

Data from previous trials provided by Eli Lilly and Incyte Corporation showed that, compared with remdesivir alone, the combination of LY-CoV555 and Gilead’s remdesivir reduced patients’ recovery time and improved clinical outcomes in patients with COVID-19. Based on these data, Eli Lilly has submitted an application for Emergency Use Authorization (EUA) to the FDA.

Reference Source:

1.Lilly and NIAID Halt COVID-19 Antibody Trial in Hospitalized Patients、

2.Lilly's COVID-19 antibody fails trial in hospitalized patients

3.Lilly Reports Third-Quarter Financial Results, Updates Guidance