Eli Lilly's Stock Plummets 13.78%: A Volatile Day in the Pharma Giant's Journey

Summary
• Eli Lilly (LLY) reports Q2 revenue of $15.56B, up 38% YoY, driven by Zepbound and Mounjaro.
• Non-GAAP EPS of $6.31 beats estimates, but shares drop 14% on mixed clinical data for orforglipron.
• Intraday price swings from $678.29 to $633.20 highlight investor uncertainty.

Eli Lilly’s Q2 earnings, while robust, triggered a sharp selloff as mixed results for its oral GLP-1 drug orforglipron overshadowed blockbuster revenue growth. The stock’s 13.78% decline reflects a tug-of-war between bullish fundamentals and bearish clinical signals, with key levels like the 52-week low of $633.20 now in focus.

Orforglipron's Mixed Results Trigger Sell-Off
Eli Lilly’s 14% intraday plunge was driven by underwhelming data from its oral GLP-1 drug orforglipron. While the Phase 3 trial met primary endpoints with a 12.4% average weight loss at the highest dose, the 25% patient discontinuation rate and subpar fat reduction (12.4%) compared to injectables like Wegovy raised red flags. Analysts highlighted the 29% placebo discontinuation rate as a mitigating factor, but the lack of differentiation in efficacy and tolerability eroded investor confidence. CEO David Ricks’ bullish guidance for 2025 revenue ($60–62B) and pipeline progress could not offset the near-term clinical disappointment.

Pharma Sector Volatility Amid GLP-1 Competition
The broader pharma sector mirrored LLY’s volatility, with Novo Nordisk (NVO) surging 7.4% as investors rotated into its Wegovy oral pill pipeline. While LLY’s Zepbound dominates U.S. prescriptions, the sector faces pricing pressures and regulatory scrutiny. Novo’s CEO Mike Doustdar emphasized Wegovy’s 16.6% weight loss in a pill, contrasting with LLY’s orforglipron challenges. The GLP-1 space remains a battleground, with LLY’s blockbuster sales offset by near-term clinical risks.

Options and ETFs in a Bearish Play
• MACD: -5.90 (bearish divergence from signal line -2.17)
• RSI: 46.11 (oversold territory, but bearish momentum persists)
• Bollinger Bands: Price at $643.485, below the middle band ($777.41), with lower band at $735.53
• 200D MA: $802.18 (price 20% below, indicating long-term bearish trend)

Technical indicators suggest a continuation of the downtrend, with key support at the 52-week low of $633.20. The Direxion Daily LLY Bull 2X Shares (ELIL) and Defiance Daily Target 2X Long LLY ETF (LLYX) are -27.5% and -27.8% lower, respectively, amplifying short-term bearish exposure. Traders should monitor the 30D support range ($761.86–$763.31) for potential rebounds but prioritize short-term bearish setups. With no options data provided, focus remains on ETFs and key price levels.

Backtest Eli Lilly Stock Performance
After a -14% intraday plunge, LLY has historically shown positive short-to-medium-term gains. The 3-Day win rate is 40.95%, the 10-Day win rate is 45.10%, and the 30-Day win rate is 51.04%, indicating a higher probability of positive returns in the immediate aftermath of such a significant drop. The maximum return during the backtest period was 9.70% over 30 days, suggesting that while there may be some volatility, LLY can recover and even exceed its previous levels.

A Crucial Crossroads for Eli Lilly: Watch for $633 Support
Eli Lilly’s 14% drop underscores the fragility of its stock despite strong fundamentals. The 52-week low of $633.20 now acts as a critical psychological barrier; a break below could trigger further selling. Conversely, a rebound above the 30D support ($761.86) might reignite bullish momentum. Investors should watch Novo Nordisk’s 7.4% surge as a sector benchmark and monitor LLY’s pipeline updates, particularly orforglipron’s regulatory timeline. For now, the bearish technical setup and mixed clinical data suggest caution, with key levels and sector dynamics dictating next steps.