Eli Lilly Stock Tumbles as Weight-Loss Drug Sales Miss Expectations

Shares of Eli Lilly and Company (LLY) tumbled on Tuesday after the drugmaker lowered its revenue forecast for the 2024 fiscal year, citing slower-than-expected sales growth for its weight-loss drugs, Mounjaro and Zepbound. The company's stock fell by around 8% in intraday trading, marking its worst day in four years.

Eli Lilly had previously forecasted full-year 2024 revenue of $45.4 billion to $46 billion, but it revised its guidance down to approximately $45.0 billion, representing a 32% growth compared to the previous year. The company also lowered its fourth-quarter 2024 revenue guidance to approximately $13.5 billion, which was below the consensus estimate of $13.97 billion.

The slower-than-expected sales growth of Eli Lilly's weight-loss drugs can be attributed to several factors, including supply constraints, manufacturing capacity limitations, lower-than-expected inventory levels, market dynamics, and insurance coverage. The high demand for these drugs has led to increased manufacturing capacity needs, but it takes time to bring new facilities online, which has contributed to the slower-than-expected sales growth.

Eli Lilly is addressing the supply-demand imbalance for its weight-loss drugs by investing in new manufacturing facilities and expanding existing ones. The company has announced investments in manufacturing sites in Lebanon, Indiana, totaling over $13 billion since 2020. Additionally, Eli Lilly has broken ground on new manufacturing sites in Lebanon, Indiana, and expects them to begin producing Zepbound and Mounjaro as early as the end of 2024. The company has also announced plans to acquire a manufacturing facility from privately-held Nexus Pharmaceuticals to produce injectable medicines.



Despite these efforts, Eli Lilly acknowledges that demand for Mounjaro and Zepbound will likely outpace supply through 2024 and potentially into 2025. The company is working to address this imbalance by increasing production as quickly as possible and exploring ways to optimize the allocation of available supplies.



Analysts and investors are closely monitoring Eli Lilly's progress in addressing the supply-demand imbalance and the potential long-term implications of the revised sales forecasts on the company's stock price. While the revised sales forecasts may have a short-term impact on the stock price, Eli Lilly's strong pipeline and long-term growth prospects remain attractive to investors.

In conclusion, Eli Lilly's stock tumbled after new forecasts showed weight-loss drug sales growing slower than expected. The company is addressing the supply-demand imbalance by investing in new manufacturing facilities and expanding existing ones. Analysts and investors are closely monitoring the situation and remain optimistic about Eli Lilly's long-term growth prospects.