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The logo of Eli Lilly & Co. at the company’s Digital Health Innovation Hub facility in Singapore on Thursday, November 14, 2024.
Hours Huiying | Bloomberg | Getty Images
Eli Lilly cut its revenue guidance on Tuesday as it said demand for its weight loss and diabetes drugs did not meet its high expectations.
Shares of the drug maker closed more than 6% higher on Tuesday.
Eli Lilly said it now expects revenue for the year 2024 of about $45 billion. That’s lower than the company’s $45.4 billion to $46 billion expected in October. The new outlook will also mark a 32% jump in revenue from the previous year.
Eli Lilly has been racing to meet growing demand for its diabetes treatment Mounjaro and obesity drug Zepbound, investing billions to increase its manufacturing capacity for the company’s growing so-called incretin drugs. The efforts seem to be paying off: the Food and Drug Administration in December he reaffirmed his decision to declare a US shortage of tirzepatide – the active ingredient in both drugs – above.
In an interview with CNBC on Tuesday, Eli Lilly CEO Dave Ricks said the company has “tons of supply in the pipeline” and “this kind of growth is likely to continue.”
He also noted that the company is adding more manufacturing capacity and expects to produce at least 60% more salable doses of its incretin drugs in the first half of the year compared to the same period in 2024.
For the fourth quarter, Eli Lilly expects $13.5 billion in revenue. The total includes about $3.5 billion for Mounjaro and $1.9 billion for Zepbound.
Wall Street had expected fourth-quarter and full-year revenue of $13.94 billion and $45.49 billion, respectively, according to analysts polled by LSEG.
The cut outlook comes as Eli Lilly competes with Novo Nordisk and other smaller rivals for weight loss and diabetes drug market share. Eli Lilly is developing an obesity pill that would be more convenient for patients and easier to manufacture, and Ricks is waiting for it to be approved just the beginning of next year.
“While the US incretin market grew 45% compared to the same quarter last year, our previous guidance had anticipated an even faster acceleration of growth for the quarter. That, in addition to the “lower-than-expected channel inventory at the end of the year contributed to our Q4 results,” Ricks said in a statement.
The drugmaker also said it expects sales of $58 billion to $61 billion in fiscal 2025.
Eli Lilly is expected to report full quarterly results on February 6.
