Eli Lilly and Company (LLY – Free Report) impressed investors with its robust second-quarter 2024 results on Aug 8. Shares jumped 9.5% following the earnings release and an additional 5.5% the next day.
The pharmaceutical giant beat on both the top and bottom lines and raised its outlook for 2024, fueled by the strong demand for its diabetes and weight-loss products — Mounjaro and Zepbound. Impressed by blowout earnings, several analysts raised their target price on the stock (read: ETFs to Profit from the Weight Loss Drug Boom).
Investors seeking to tap the opportune moment could bet on ETFs having the largest exposure to the drugmaker. These include iShares U.S. Pharmaceuticals ETF (IHE – Free Report) , Roundhill GLP-1 & Weight Loss ETF (OZEM – Free Report) , Horizon Kinetics Medical ETF (MEDX) , Amplify Weight Loss Drug & Treatment ETF (THNR – Free Report) and iShares U.S. Healthcare ETF (IYH – Free Report) .
Earnings in Focus
Earnings per share came in at $3.92, surpassing the Zacks Consensus Estimate of $2.64 and improving 86% from the year-ago number. Revenues rose 36% to $11.3 billion and edged past the estimated $9.83 billion. The year-over-year sales growth was driven by strong sales of Mounjaro, Zepbound and Verzenio (see: all the Healthcare ETFs here).
Diabetes drug Mounjaro’s sales skyrocketed more than 215% to $3.09 billion, while breast cancer treatment Verzenio sales soared 44% year over year. Weight-loss drug Zepbound, launched in the United States in November last year, raked in about $1.24 billion in sales during the quarter. Mounjaro and Zepbound combined made up nearly 40% of Lilly’s quarterly revenues.
Humalog sales jumped 43% from the year-ago quarter. The other drugs — Jardiance and Taltz — generated double-digit sales growth, while Trulicity slumped 31% year over year.
Eli Lilly increased its full-year outlook for the second time this year. It raised the revenue guidance to $45.4-$46.6 billion from $42.4-$43.6 billion and the adjusted earnings per share guidance to $16.10-$16.60 from $13.50-$14.00.
ETFs to Tap
iShares U.S. Pharmaceuticals ETF (IHE – Free Report)
iShares U.S. Pharmaceuticals ETF offers exposure to 36 companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. Of these, Eli Lilly takes the second spot, accounting for a 22.4% share. iShares U.S. Pharmaceuticals ETF has $669.5 million in AUM and charges 39 bps in fees and expenses. Volume is lower as it exchanges about 60,000 shares a day. The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
Roundhill GLP-1 & Weight Loss ETF (OZEM – Free Report)
Roundhill GLP-1 & Weight Loss ETF is the world’s first GLP-1 ETF and is actively managed. Roundhill believes that weight loss drugs, including GLP-1 agonists, represent one of the most revolutionary advancements in the global pharmaceutical industry. OZEM holds 33 stocks in its basket, with LLY occupying the top position at 19.2% share. Roundhill GLP-1 & Weight Loss ETF has accumulated $40.6 million in its asset base since its inception in late May and charges 59 bps in annual fees. It trades in an average daily volume of 56,00 shares (read: ETFs in Focus as Competition Heats Up in Weight Loss Drug Segment).
Horizon Kinetics Medical ETF (MEDX)
Horizon Kinetics Medical ETF is an actively managed ETF that invests primarily in patented first-line pharmaceuticals and biologics, as these products tend to have high profit margins and significant barriers to entry. It holds 37 stocks in its basket, with Eli Lilly taking the top spot at 16.5% of the portfolio. Horizon Kinetics Medical ETF has gathered $17.3 million in its asset base and charges 85 bps in annual fees. It trades in an average daily volume of 500 shares.
Amplify Weight Loss Drug & Treatment ETF (THNR – Free Report)
Amplify Weight Loss Drug & Treatment ETF provides access to global companies involved in the pharmaceutical manufacturing of GLP-1 agonist or enablers of such businesses. It tracks the VettaFi Weight Loss Drug & Treatment Index and holds 27 stocks in its basket. Eli Lilly takes the top spot accounting for 14.7% share. Amplify Weight Loss Drug & Treatment ETF charges 59 bps in annual fees and has AUM of $3.1 million. It trades in an average daily volume of 5,000 shares.
iShares U.S. Healthcare ETF (IYH – Free Report)
iShares U.S. Healthcare ETF offers exposure to 106 U.S. healthcare equipment and services, pharmaceuticals, and biotechnology companies by tracking the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index. Here, Eli Lilly is the top firm, accounting for 13.2% of the total assets. In terms of industrial exposure, pharma takes the top spot at 31.6%, followed by healthcare equipment (18.8%) and biotech (18.6%).
iShares U.S. Healthcare ETF has amassed $3.4 billion in its asset base and charges 40 bps in annual fees. It trades in a moderate volume of around 1927,000 shares a day and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.