Eli Lilly (LLY) experienced a stock decline exceeding 6% on Tuesday following the release of its fourth-quarter 2024 revenue guidance, which fell short of Wall Street expectations.
The pharmaceutical giant revised its Q4 revenue projection downward by 5% to $13.5 billion, missing the consensus estimate of $14 billion by $500 million. Despite the revision, this figure still represents a substantial 45% increase compared to the same period in 2023. Lilly’s previous guidance ranged from $13.9 billion to $14.5 billion. The company also issued full-year 2024 revenue guidance of $45 billion, a 32% year-over-year increase.
CEO David Ricks attributed the shortfall to slower-than-anticipated growth in the U.S. incretin market, hormones crucial for regulating blood sugar levels after meals. While the market expanded by 45% year-over-year, Lilly’s initial projections had factored in a more accelerated growth trajectory. Lower-than-predicted channel inventory at year-end also contributed to the Q4 results. Ricks emphasized the company’s ongoing progress in expanding manufacturing capacity, ensuring a consistent supply of tirzepatide across all doses throughout the quarter.
The stock’s reaction surprised some analysts who had already anticipated a softer Q4 performance. Leerink Partners analyst David Risinger noted the consecutive quarters of disappointing results but expressed optimism for 2025 and beyond, citing anticipated financial performance and pipeline developments, particularly Phase 3 results for oral GLP-1 orforglipron.
JPMorgan analyst Chris Schott echoed this sentiment, suggesting that while the Q4 dynamics presented a temporary setback, the focus will likely shift to the continued growth in prescriptions, the newly released 2025 guidance, and upcoming catalysts.
Lilly’s flagship products, GLP-1 tirzepatide-based Mounjaro (for diabetes) and Zepbound (for weight loss), are also projected to fall short of consensus estimates for Q4. Guidance for Mounjaro stands at $3.5 billion, while Zepbound is expected to generate $1.9 billion.
Recent weekly prescription tracking data from JPMorgan, utilizing information from IQVIA, reveals a significant year-over-year increase in prescriptions for both drugs. Zepbound boasts a 241% surge, while Mounjaro shows a 51% rise. This sustained growth in prescription volume suggests continued strong demand for these treatments.
This analysis was provided by Anjalee Khemlani, Senior Health Reporter at Yahoo Finance. She covers pharmaceuticals, insurance, healthcare services, digital health, pharmacy benefit managers, and health policy. You can find her on X, LinkedIn, and Bluesky @AnjKhem. For further analysis of health industry news and its impact on stock prices, please visit Yahoo Finance’s dedicated health section.
