Eli Lilly Plunges 12.23% Amid Trump Tariff Threat, Rival's Weakness

On August 7, 2025, Eli Lilly's stock experienced a significant drop of 12.23% in pre-market trading, marking a notable decline in its share price.

One of the primary factors contributing to this decline is the recent threat by former President Donald Trump to impose a 250% tariff on the pharmaceutical industry. This potential tariff increase has raised concerns among industry executives about the impact on drug costs for patients, leading to a sell-off in Eli Lilly's shares.

Additionally, Eli Lilly's stock has been influenced by the financial performance of its rival, Novo Nordisk. Novo Nordisk's recent guidance cut and poor financial results have dragged down Eli Lilly's share price in sympathy, as investors reassess the competitive landscape in the pharmaceutical sector.

Despite these challenges, Eli Lilly has seen positive developments with its drug Mounjaro. The company announced that Mounjaro achieved its primary endpoint in a head-to-head trial, demonstrating a 16% lower rate of all-cause death compared to Trulicity. This clinical success suggests more comprehensive health benefits and could support future growth prospects for Eli Lilly.

However, the market sentiment remains cautious, with some investors viewing the recent weakness in Eli Lilly's shares as unjustified. The company's strong financial performance and high probability clinical catalysts are expected to drive future growth, but the potential tariff increase and competitive pressures pose significant risks.