Eli Lilly Shares Tumble Amid Revised Forecast Due to Weak Demand for Weight Loss Drugs

Eli Lilly has adjusted its revenue forecast for Tuesday, acknowledging that the anticipated demand for its diabetes and weight management medications has fallen short of expectations, leading to a revision of their financial projections.

On Tuesday morning, shares of the pharmaceutical company experienced a decline of approximately 6%.

The company now forecasts that its total revenue for the full year 2024 will be around $45 billion, a decrease from the previous estimate range of $45.4 billion to $46 billion. Nonetheless, this updated projection still signifies a 32% increase compared to the previous year's revenue.

For the last quarter of the year, Eli Lilly is predicting revenues of $13.5 billion, with $3.5 billion attributed to Mounjaro, a treatment for diabetes, and $1.9 billion from Zepbound, a popular obesity drug. These are part of the company's rapidly expanding incretin drug category.

This downward adjustment happens as Eli Lilly contends with numerous rivals in the burgeoning field of diabetes and weight management pharmaceuticals. In a strategic move, the company is working on an oral obesity medication that aims to offer greater convenience for users and ease in manufacturing, potentially launching early next year.

According to analysts polled by LSEG, Wall Street anticipated that Eli Lilly would achieve $13.94 billion in fourth-quarter revenue and $45.49 billion for the entire year.

CEO David Ricks commented, "While the U.S. market for incretin therapies expanded by 45% relative to the same time frame last year, our prior guidance foresaw an even swifter acceleration for this quarter. Coupled with lower-than-anticipated year-end inventory levels, this discrepancy impacted our Q4 performance."

Looking ahead, Eli Lilly anticipates generating between $58 billion and $61 billion in revenue during the 2025 fiscal year.

The complete financial performance for the quarterly period is scheduled to be unveiled by Eli Lilly on February 6.