The second-quarter earnings season has come to an end for large drug and biotech companies, with Eli Lilly (NYSE: LLY) reporting its results last week. Per the Zacks classification, the pharma/biotech industry comes under the broader Medical sector, which comprises pharma/biotech as well as medical device companies. As of Aug 7, the Earnings Trends report showed that 85.7% of medical companies beat estimates for earnings and 75.5% beat the same for revenues. While earnings per share rose 17.1% year over year, revenues rose 7.6%. Concerns around the economy and inflation, Medicare drug price negotiations, the Federal Trade Commission's scrutiny of M&A deals, regular pipeline setbacks and generic/biosimilar competition for blockbuster drugs are some of the headwinds faced by drug developers. Amid these headwinds, three drugmakers — Eli Lilly and Company, Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) — caught our eye as they raised their earnings as well as sales guidance for 2024. All three companies beat second-quarter estimates for both earnings and sales. A better-than-expected earnings performance coupled with an increased outlook raises investor optimism about companies. Nonetheless, a single quarter's results are not so important for long-term investors, and the focus should, rather, be on the fundamentals of these companies. Let's discuss them in detail. Eli Lilly and Company Lilly reported second-quarter 2024 adjusted earnings per share of $3.92, which rose 86% year over year. Revenues of $11.3 billion rose 36% year over year. Strong demand for its successful GLP-1-based treatments, Mounjaro and Zepbound, and other key drugs, Verzenio and Taltz, pulled up the top line in the quarter. Almost all key drugs, Mounjaro, Zepbound, Taltz and Verzenio, beat expectations. Mounjaro and Zepbound together recorded more than $4 billion in sales. Lilly faces continued supply constraints for incretin-based products like Trulicity, Mounjaro and Zepbound. Demand for tirzepatide drugs, Mounjaro and Zepbound, is extremely strong and exceeds supply. Lilly is investing in new advanced manufacturing plants and lines in the United States and Europe to increase supply. With the increase in production volumes, channel dynamics and stocking levels in the United States improved, which boosted sales growth in the quarter. While Lilly said that supply and demand are more balanced now, the supply issues might continue for some doses if demand exceeds supply. Strong demand for Mounjaro and Zepbound, as well as non-incretin products, pushed Lilly to raise its sales and earnings guidance ranges for 2024. Lilly also has better visibility on its production plans for Mounjaro and Zepbound for the year and planned launches of Mounjaro in international markets. The company raised its previously issued sales and earnings guidance for 2024. Lilly raised its revenue guidance range to $45.4 billion to $46.6 billion from the prior expectation of $42.4 to $43.6 billion. The earnings per share guidance was raised from a range of $13.50 to $14.00 per share to $16.10 to $16.60 per share. Lilly has seen unparalleled success with Mounjaro and Zepbound. Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Lilly, with demand for ...