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Eli Lilly and Company (LLY - Free Report) posted robust third-quarter 2023 earnings results, beating estimates on both the top and bottom lines. Its Mounjaro anti-obesity drug continued its robust performance. However, the pharmaceutical giant slashed its earnings outlook for the full year on the back of a deal spree.
Following the earnings beat, the stock rose 4.7% at the close of the day. Investors seeking to tap the strength could bet on ETFs having the largest exposure to the drugmaker. These include iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , Harbor Health Care ETF (MEDI - Free Report) , Horizon Kinetics Medical ETF (MEDX - Free Report) , iShares U.S. Healthcare ETF (IYH - Free Report) and Health Care Select Sector SPDR Fund (XLV - Free Report) .
Inside The Surge
Earnings per share came in at 10 cents against the Zacks Consensus Estimate of a loss of 8 cents. Eli Lilly had recorded earnings of $1.98 per share in the year-ago quarter. Revenues rose 37% to $9.5 billion and edged past the estimate of $8.9 billion. The robust results were driven by strong sales of Mounjaro, Verzenio, and Jardiance, as well as $1.42 billion from the sale of rights for the olanzapine portfolio (Zyprexa).
Mounjaro's sales jumped more than seven times to $1.4 billion while Verzenio jumped 68% to more than $1 billion. Four other drugs — Jardiance, Olumiant, Tyvyt, and Retevmo — generated double-digit percentage sales growth in the third quarter (read: Growth ETFs to Shine as Fed Hints at End of Rate Hike Era).
Eli Lilly's growth will likely accelerate tremendously next year. The company is expected to receive the Food and Drug Administration approval for Mounjaro in chronic weight management and donanemab in treating early Alzheimer's disease.
The pharma giant slashed its 2023 adjusted earnings per share guidance to $6.50-$6.70 from the previous range of $9.70-$9.90. It reiterated its revenue forecast in the range of $33.4 billion to $33.9 billion.
iShares U.S. Pharmaceuticals ETF provides exposure to 34 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 top spot, accounting for a 25.3% share.
iShares U.S. Pharmaceuticals ETF has $560.8 million in AUM and charges 40 bps in fees and expenses. Volume is lower as it exchanges about 15,000 shares a day. The fund has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
Harbor Health Care ETF is actively managed by Westfield Capital and primarily invests in the securities of companies principally engaged in the research, development, production or distribution of products and services related to the healthcare industry. MEDI is a concentrated portfolio of 34 companies that Westfield believes are best positioned to benefit from the secular growth and innovation within the U.S. healthcare system with long-term alpha potential. Eli Lilly occupies the third position with an 11.4% share.
Harbor Health Care ETF has accumulated $4.3 million in its asset base while trading in an average daily volume of 500 shares. It charges 80 bps in annual fees.
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 33 stocks in its basket, with Eli Lilly taking the top spot at 11.7% of the portfolio.
Horizon Kinetics Medical ETF has gathered $17 million in its asset base since its inception in January and charges 85 bps in annual fees. It trades in an average daily volume of 600 shares.
iShares U.S. Healthcare ETF offers exposure to 115 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 second firm, accounting for 9.8% of the total assets. In terms of industrial exposure, pharma takes the top spot at 30.9%, followed by healthcare equipment (18.5%) and biotech (18.3%).
iShares U.S. Healthcare ETF has amassed $3 billion in its asset base, while charging 40 bps in annual fees. It trades in a moderate volume of around 57,000 shares a day and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Sector ETFs for Bountiful Returns in November).
Health Care Select Sector SPDR Fund is the most popular healthcare ETF and follows the Health Care Select Sector Index. It holds 65 securities in its basket, with LLY occupying the second position at 9.5% of the assets. Pharma and healthcare providers and services take the largest share at 30.8% and 24% share, respectively. Healthcare equipment and supplies, biotech, and life sciences tools & services also have double-digit exposure each.
Health Care Select Sector SPDR Fund manages $35.7 billion in its asset base and trades in a heavy volume of around 9.6 million shares. The expense ratio comes in at 0.10%. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
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Eli Lilly Beats on Q3 Earnings: ETFs to Buy
Eli Lilly and Company (LLY - Free Report) posted robust third-quarter 2023 earnings results, beating estimates on both the top and bottom lines. Its Mounjaro anti-obesity drug continued its robust performance. However, the pharmaceutical giant slashed its earnings outlook for the full year on the back of a deal spree.
Following the earnings beat, the stock rose 4.7% at the close of the day. Investors seeking to tap the strength could bet on ETFs having the largest exposure to the drugmaker. These include iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , Harbor Health Care ETF (MEDI - Free Report) , Horizon Kinetics Medical ETF (MEDX - Free Report) , iShares U.S. Healthcare ETF (IYH - Free Report) and Health Care Select Sector SPDR Fund (XLV - Free Report) .
Inside The Surge
Earnings per share came in at 10 cents against the Zacks Consensus Estimate of a loss of 8 cents. Eli Lilly had recorded earnings of $1.98 per share in the year-ago quarter. Revenues rose 37% to $9.5 billion and edged past the estimate of $8.9 billion. The robust results were driven by strong sales of Mounjaro, Verzenio, and Jardiance, as well as $1.42 billion from the sale of rights for the olanzapine portfolio (Zyprexa).
Mounjaro's sales jumped more than seven times to $1.4 billion while Verzenio jumped 68% to more than $1 billion. Four other drugs — Jardiance, Olumiant, Tyvyt, and Retevmo — generated double-digit percentage sales growth in the third quarter (read: Growth ETFs to Shine as Fed Hints at End of Rate Hike Era).
Eli Lilly's growth will likely accelerate tremendously next year. The company is expected to receive the Food and Drug Administration approval for Mounjaro in chronic weight management and donanemab in treating early Alzheimer's disease.
The pharma giant slashed its 2023 adjusted earnings per share guidance to $6.50-$6.70 from the previous range of $9.70-$9.90. It reiterated its revenue forecast in the range of $33.4 billion to $33.9 billion.
ETFs to Tap
iShares U.S. Pharmaceuticals ETF (IHE - Free Report)
iShares U.S. Pharmaceuticals ETF provides exposure to 34 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 top spot, accounting for a 25.3% share.
iShares U.S. Pharmaceuticals ETF has $560.8 million in AUM and charges 40 bps in fees and expenses. Volume is lower as it exchanges about 15,000 shares a day. The fund has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
Harbor Health Care ETF (MEDI - Free Report)
Harbor Health Care ETF is actively managed by Westfield Capital and primarily invests in the securities of companies principally engaged in the research, development, production or distribution of products and services related to the healthcare industry. MEDI is a concentrated portfolio of 34 companies that Westfield believes are best positioned to benefit from the secular growth and innovation within the U.S. healthcare system with long-term alpha potential. Eli Lilly occupies the third position with an 11.4% share.
Harbor Health Care ETF has accumulated $4.3 million in its asset base while trading in an average daily volume of 500 shares. It charges 80 bps in annual fees.
Horizon Kinetics Medical ETF (MEDX - Free Report)
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 33 stocks in its basket, with Eli Lilly taking the top spot at 11.7% of the portfolio.
Horizon Kinetics Medical ETF has gathered $17 million in its asset base since its inception in January and charges 85 bps in annual fees. It trades in an average daily volume of 600 shares.
iShares U.S. Healthcare ETF (IYH - Free Report)
iShares U.S. Healthcare ETF offers exposure to 115 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 second firm, accounting for 9.8% of the total assets. In terms of industrial exposure, pharma takes the top spot at 30.9%, followed by healthcare equipment (18.5%) and biotech (18.3%).
iShares U.S. Healthcare ETF has amassed $3 billion in its asset base, while charging 40 bps in annual fees. It trades in a moderate volume of around 57,000 shares a day and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Sector ETFs for Bountiful Returns in November).
Health Care Select Sector SPDR Fund (XLV - Free Report)
Health Care Select Sector SPDR Fund is the most popular healthcare ETF and follows the Health Care Select Sector Index. It holds 65 securities in its basket, with LLY occupying the second position at 9.5% of the assets. Pharma and healthcare providers and services take the largest share at 30.8% and 24% share, respectively. Healthcare equipment and supplies, biotech, and life sciences tools & services also have double-digit exposure each.
Health Care Select Sector SPDR Fund manages $35.7 billion in its asset base and trades in a heavy volume of around 9.6 million shares. The expense ratio comes in at 0.10%. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.