Eli Lilly’s stock faced significant declines following a third-quarter earnings report that fell short of expectations for two of its most high-profile products, the diabetes medication Mounjaro and the weight-loss treatment Zepbound.
The company announced a reduction in its 2024 earnings and revenue projections, pointing to lower-than-expected sales for these blockbuster drugs as a primary factor.
Sales for Mounjaro, an injectable diabetes medication, surged 121% year-over-year to reach $3.11 billion in the third quarter. However, this result came in below the $3.77 billion forecasted by analysts. Likewise, Zepbound generated $1.26 billion in revenue, missing projections of $1.73 billion. Eli Lilly attributed these shortfalls partly to inventory reductions in the US wholesaler channel, estimating a mid-single-digit impact on sales as a result.
On a broader scale, Eli Lilly’s total quarterly revenue rose 20% to $11.44 billion but missed analyst expectations of $12.09 billion. The company’s earnings per share also fell below estimates, with adjusted earnings of $1.18 compared to a projected $1.45. The miss was partly influenced by a $2.8 billion charge related to the acquisition of Morphic Holding, which specializes in treatments for bowel diseases.
In response to these results, Eli Lilly has adjusted its full-year guidance, now anticipating earnings of $13.02 to $13.52 per share, compared to its prior range of $16.10 to $16.60 per share. The company also trimmed the higher end of its annual revenue forecast, projecting $45.4 billion to $46 billion in sales, down from the previously estimated maximum of $46.6 billion.
Despite these challenges, analysts remain cautiously optimistic. David Risinger of Leerink Partners noted that while the third-quarter results were below expectations, the broader outlook for Eli Lilly’s obesity and diabetes portfolio remains strong, particularly as the company continues to build a global presence in the weight-loss treatment market.
Inventory issues and intense demand have led both Eli Lilly and competitor Novo Nordisk to invest heavily in expanding production capacity for their injectable treatments. According to Eli Lilly CEO David Ricks, the company has recently made progress in improving the availability of Mounjaro and Zepbound across the US, although some supply challenges persist.
Bloomberg, CNBC, and Investor’s Business Daily contributed to this report.
