Biotech
Wednesday, October 30th, 2024 3:38 pm EDT
Key Points
- Disappointing Q3 Sales and Lowered Profit Guidance: Eli Lilly’s third-quarter earnings and revenue missed expectations due to lower-than-expected sales of weight-loss drug Zepbound and diabetes treatment Mounjaro, as well as a $2.8 billion acquisition-related charge. The company reduced its full-year profit and revenue outlooks accordingly.
- High Demand and Supply Constraints: Demand for Zepbound and Mounjaro has outpaced supply, though Lilly has eased some production constraints and expects a 50% increase in incretin drug manufacturing capacity by late 2024, with further expansions planned for 2025.
- FDA and Compounding Pharmacy Dispute: The FDA removed tirzepatide, the active ingredient in Zepbound and Mounjaro, from its shortage list, which Lilly supports. However, compounding pharmacies have opposed this decision, as they produce unregulated versions of these drugs, raising safety and regulatory concerns.
Eli Lilly’s third-quarter earnings report fell short of Wall Street expectations, leading to a sharp drop in its stock price by over 12%. The company attributed the shortfall to underwhelming sales of its key weight-loss drug, Zepbound, and diabetes medication, Mounjaro, as well as a $2.8 billion charge related to its acquisition of Morphic Holding, a drugmaker focused on bowel disease treatments. Lilly adjusted its full-year profit outlook downward, now anticipating earnings per share between $13.02 and $13.52, lower than the previously projected range of $16.10 to $16.60. Third-quarter revenue reached $11.44 billion, which, despite being 20% higher than the same period last year, still fell short of analyst expectations of $12.11 billion.
Zepbound generated $1.26 billion in revenue, missing the expected $1.76 billion, while Mounjaro brought in $3.11 billion, also below the anticipated $3.77 billion. Demand for these drugs, which target appetite control and blood sugar regulation, has surged over the past year, straining supply despite significant investments by both Lilly and rival Novo Nordisk to expand manufacturing capacity. Inventory issues among wholesalers impacted third-quarter sales, according to CEO David Ricks, who explained that the company chose to delay advertising for Zepbound to ensure sufficient supply for customers, with promotional efforts planned to begin in November.
Lilly reported that its production capacity for incretin drugs like Zepbound and Mounjaro is set to increase by 50% in the latter half of 2024 and will expand further by 2025. Additionally, the FDA has removed the active ingredient in these drugs, tirzepatide, from its shortage list, a move that Lilly supports as it aims to control the market and address safety concerns over compounded, unregulated versions of these medications.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/10/30/eli-lilly-lly-earnings-q3-2024.html
