A sign at Eli Lilly and Company’s Digital Health Innovation Center facility in Singapore on Thursday, November 14, 2024.
Ore Huiying | Bloomberg | Getty Images
Eli Lilly and Company It cut its revenue guidance on Tuesday as the company said demand for its weight loss and diabetes drugs failed to meet its lofty expectations.
The drugmaker’s shares fell about 6% in early trading on Tuesday.
Eli Lilly said it currently expects full-year revenue in 2024 to be about $45 billion. That’s below the company’s valuation of $45.4 billion to $46 billion Expected in October. The new outlook still shows revenue rising 32% from the prior year.
Eli Lilly has been racing to meet rising demand for its diabetes treatment Mounjaro and obesity drug Zepbound, investing billions of dollars to boost production capacity of the company’s booming so-called incretin drugs. The efforts appear to be paying off: U.S. Food and Drug Administration December reiterate its decision announced that the U.S. shortage of tezepatide, the active ingredient in both drugs, has ended.
Eli Lilly CEO Dave Ricks told CNBC on Tuesday that the company has “a lot of supply coming online” and that “that growth is likely to continue.”
He also noted that the company will add more manufacturing capacity and expects to increase the number of salable doses of its incretin drugs by at least 60% in the first half of this year compared with the same period in 2024.
Eli Lilly expects fourth-quarter revenue of $13.5 billion. The total includes approximately $3.5 billion for Mounjaro and $1.9 billion for Zepbound.
Analysts polled by London Stock Exchange Group (LSEG) said Wall Street had expected fourth-quarter and full-year revenue of $13.94 billion and $45.49 billion, respectively.
Eli Lilly downgrades outlook as it competes with Novo Nordisk and other smaller rivals vying for a share of the exploding weight loss and diabetes drug markets. Eli Lilly is developing a weight-loss drug that is more convenient for patients and easier to make, and Ricks expects it will be approved As soon as early next year.
“While the U.S. incretin market grew 45% compared with the same period last year, our previous guidance expected faster growth this quarter. This, combined with lower than expected year-end channel inventories, resulted in our fourth-quarter results, ” Ricks said in the statement.
The drugmaker also said it expects sales to reach $58 billion to $61 billion in fiscal 2025.
Eli Lilly is expected to report full quarter results on February 6.
