Eli Lilly Missed Sales Expectations Again. Should Investors Be Worried?

Eli Lilly and Company (NYSE: LLY) has once again missed its sales expectations, this time for the fourth quarter of 2024. The pharmaceutical giant announced that its revenue for the quarter was approximately $13.5 billion, falling short of the $13.9 billion that analysts had forecast. This marks the second consecutive quarter that Lilly has disappointed investors with its earnings.

The primary factors contributing to Lilly's missed sales expectations were slower-than-anticipated growth in the U.S. incretin market and lower-than-expected channel inventory at year-end. The U.S. incretin market grew by 45% compared to the same quarter last year, but this growth was slower than what the company had anticipated for the quarter. Additionally, Lilly experienced lower-than-expected channel inventory at the end of the year, which further impacted its Q4 sales.

Despite these setbacks, Lilly remains optimistic about its obesity and diabetes drugs, Mounjaro and Zepbound, for the coming year. The company expects sales of these drugs to continue their robust growth into 2025, driven by strong demand and additional manufacturing capacity. Lilly anticipates revenue growth of 32% in 2025, with sales reaching between $58.0 billion and $61.0 billion.

However, investors may be concerned about the company's ability to meet its ambitious growth targets, given its recent track record of missed sales expectations. Lilly's manufacturing capacity expansion has been a significant factor in its ability to meet demand, particularly for its incretin drugs. In the fourth quarter of 2024, Lilly reported that it had made progress on its manufacturing build-out, with U.S. supply across all doses of tirzepatide (Zepbound) available throughout the quarter. This expansion has allowed the company to produce at least 60% more salable doses of incretins in the first half of 2025 compared to the first half of 2024.



In conclusion, Eli Lilly's missed sales expectations in Q4 2024 have raised concerns among investors about the company's ability to meet its ambitious growth targets. While Lilly remains optimistic about the outlook for its obesity and diabetes drugs, investors may be cautious about the company's prospects until it demonstrates a consistent track record of meeting or exceeding sales expectations. As the company continues to expand its manufacturing capacity and launch new drugs, investors will be watching closely to see if Lilly can deliver on its promises in 2025.