The Eli Lilly & Co. logo at the company's Digital Health Innovation Hub facility in Singapore, Thursday, Nov. 14, 2024.
Huiying Ore | Bloomberg | fake images
Eli Lilly cut its revenue guidance on Tuesday because it said demand for its weight loss and diabetes drugs would not meet its lofty expectations.
The pharmaceutical company's shares closed on Tuesday with a drop of more than 6%.
Eli Lilly said it now expects full-year 2024 revenue of about $45 billion. That figure is down from the $45.4 billion to $46 billion the company anticipated in October. The new outlook would still mark a 32% increase in revenue from the previous year.
Eli Lilly has been racing to meet growing demand for its diabetes treatment Mounjaro and its obesity drug Zepbound, investing billions to boost its manufacturing capacity for the company's burgeoning drugs called incretins. The efforts appear to be bearing fruit: In December the Food and Drug Administration reaffirmed its decision to declare an end to the U.S. shortage of tirzepatide, the active ingredient in both drugs.
In an interview with CNBC on Tuesday, Eli Lilly CEO Dave Ricks said the company has “tons of supply coming online” and “that kind of growth will likely continue.”
He also noted that the company will add more manufacturing capacity and expects to produce at least 60% more salable doses of its incretin drugs in the first half of the year compared to the same period in 2024.
For the fourth quarter, Eli Lilly expects $13.5 billion in revenue. The total includes about $3.5 billion for Mounjaro and $1.9 billion for Zepbound.
Wall Street had expected fourth-quarter and full-year revenue of $13.94 billion and $45.49 billion, respectively, according to analysts surveyed by LSEG.
Perspective cut comes as Eli Lilly competes with Nordisk and other smaller rivals for a share of the growing market for diabetes and weight loss drugs. Eli Lilly is developing an obesity pill that would be more convenient for patients and easier to manufacture, and Ricks hopes it will be approved early next year.
“While the US incretins market grew 45% compared to the same quarter last year, our previous guidance had anticipated an even faster growth acceleration for the quarter. That, plus an inventory of channels lower than expected at year-end, contributed to our fourth quarter results,” Ricks said in a statement.
The drugmaker also said it expects sales of between $58 billion and $61 billion in fiscal 2025.
Eli Lilly is expected to report full quarterly results on February 6.
