Eli Lilly Stock Plunges as Weight-Loss Drug Sales Disappoint
Tuesday, Jan 14, 2025 11:41 am ET
3min read Shares of Eli Lilly and Company (LLY) plummeted on Tuesday, January 14, 2025, following the pharmaceutical giant's announcement of revised guidance for its weight-loss drugs, Mounjaro and Zepbound. The company's stock price fell by 8.03% to $775.10 at the last check, erasing billions from its market capitalization. This decline can be attributed to the company's expected 2024 revenue being $400 million, or about 3%, below the guidance range issued during the third-quarter earnings call. Additionally, the company's Q4 2024 revenue is expected to be $13.5 billion, which is approximately $400 million below the low end of recently issued financial guidance.
Eli Lilly's revised guidance comes as a result of slower-than-expected growth in the U.S. incretin market, which grew by 45% compared to the same quarter last year, but fell short of the company's previous expectations. The company also cited lower-than-expected channel inventory at the end of the year and manufacturing constraints as contributing factors to the Q4 results. Despite these challenges, Eli Lilly anticipates 2025 revenue to be in the range of $58.0 billion to $61.0 billion, representing a 32% growth at the midpoint compared to expected 2024 revenue.
The disappointing sales performance of Mounjaro and Zepbound has raised concerns among investors about the company's ability to maintain its growth trajectory in the weight-loss drug market. However, Eli Lilly remains optimistic about its long-term prospects, citing the potential for new medicines such as Jaypirca, Ebglyss, Omvoh, and Kisunla to contribute to revenue growth in 2025. The company also expects to produce at least 60% more salable doses of incretins in the first half of 2025 compared to the first half of 2024, which should help alleviate manufacturing constraints and support the growth of Mounjaro and Zepbound.
As Eli Lilly works to regain momentum in the weight-loss drug market, the company can consider several strategic moves to address the challenges it faces. These include accelerating manufacturing expansion, diversifying the product pipeline, strengthening marketing and sales efforts, addressing channel inventory challenges, exploring combination therapies, and closely monitoring market dynamics to adapt its strategies accordingly.
In conclusion, Eli Lilly's revised guidance for its weight-loss drugs has led to a significant decline in the company's stock price and market capitalization. However, the company remains optimistic about its long-term prospects and is taking steps to address the challenges it faces in the weight-loss drug market. As Eli Lilly works to regain momentum, investors will be closely watching the company's progress and the performance of its weight-loss drugs in the coming quarters.
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