US-based Eli Lilly & Co. (NYSE: LLY) released its Q2 2022 financial report, revealing a first quarterly dip in global revenues in two years. Global sales revenues were down 1% year-on-year (YOY) in constant currency terms to USD6.488 billion. This decline was primarily due to the full impact of generic competition against cancer drug Alimta (pemetrexed) in Europe and Japan, and the entry of the first generic in the United States. Additionally, a 3% decrease was attributed to the unfavorable impact of foreign exchange rates. Over the six-month H1’22 period, total revenues were up 8% YOY to USD14.298 billion.
Key Growth Drivers
Lilly’s key growth drivers included diabetes drugs Trulicity (dulaglutide), Jardiance (empagliflozin), and Mounjaro (tirzepatide), the CDK4/6 breast cancer drug Verzenio (abemaciclib), autoimmune disease drug Taltz (ixekizumab), RET-targeted lung cancer drug Retevmo (selpercatinib), migraine therapy Emgality (galcanezumab), JAK inhibitor Olumiant (baricitinib), programmed death-1 inhibitor Tyvyt (sintilimab) co-developed with China’s Innovent, and VEGF anti-cancer drug Cyramza (ramucirumab). These products collectively grew sales by 20% and accounted for 67% of Q2 revenue. Separately, COVID-19 antibody sales increased by 81% YOY to USD1.47 billion.
China Market Impact
Lower realized pricing in China significantly impacted global performance. The market was the worst-performing during the quarter, with sales down 32% YOY to USD352 million. Over the six-month period, China sales were down 15% to USD759 million. Government pricing in China, including price cuts for National Reimbursement Drug List (NRDL) listings for products such as Verzenio and Tyvyt, was blamed. Tyvyt revenues in China reached USD73.6 million, a 30% YOY drop, reflecting increased competitive pressure and pricing issues. Although volumes of Verzenio and Tyvyt increased in China, they were insufficient to offset the price declines.
Humalog and Future Outlook
Lilly’s Humalog (insulin lispro) was included in the sixth round of the volume-based procurement (VBP) program focused on insulins held in November 2021 and implemented from May this year. Lilly secured five tender spots for its insulin products at the cost of an overall average price cut exceeding 72%. CFO Anat Ashkenazi noted during the earnings conference call that the company expects improved access to drive future volume growth, offsetting the price decline over time for Humalog in China.
Ashkenazi also stated that Lilly anticipates a mid-single-digit net price decline in each of the US, EU, and Japan, and a double-digit price decline in China for the remainder of 2022. Despite these challenges, guidance for full-year global revenues remains unchanged, with single-digit growth forecast.-Fineline Info & Tech
