What happened

Shares of Eli Lilly (NYSE:LLY) jumped by 6% on Tuesday. The healthy gain came after the drugmaker raised its full-year 2020 revenue and earnings guidance, and provided a positive outlook for 2021. Lilly also announced plans to acquire Prevail Therapeutics (NASDAQ:PRVL)

So what

Investors love when a company's outlook improves. And Lilly's forecast looked better across the board.

Man wearing a coat and tie holding binoculars with dollar signs in the lenses

Image source: Getty Images.

The pharmaceutical giant now expects 2020 revenue of between $24.2 billion and $24.7 billion, up from the previous guidance range of  $23.7 billion to $24.2 billion. Management projects adjusted earnings per share for the year will be between $7.45 and $7.65, an increase from the prior range of $7.20 to $7.40.

Next year should be even better. Lilly anticipates 2021 revenue will be between $26.5 billion and $28 billion, with adjusted earnings per share of $7.75 to $8.40.

Lilly's optimism stems from the continuing sales growth within its strong product lineup. In particular, autoimmune disease drugs Olumiant and Taltz, diabetes drugs Trulicity and Jardiance, cancer drugs Cyramza, Retevmo, Tyvyt, and Verzenio, and migraine drug Emgality are enjoying tremendous momentum. Lilly also expects a revenue boost of between $1 billion and $2 billion from its COVID-19 therapies.

The acquisition of Prevail for a little over $1 billion could also prove to be a smart move. With the deal, Lilly will pick up Prevail's promising gene-therapy candidates, which target neurodegenerative diseases.

Now what

The big pharma stock doesn't appear to have any major roadblocks in sight. Its acquisition of Prevail hasn't been finalized yet, but will likely close in the first quarter of 2021. 

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