Eli Lilly (NYSE: LLY) saw its stock decline sharply by 6.5% on January 14, following the release of its fourth-quarter 2024 revenue guidance, which fell short of Wall Street expectations.
The pharmaceutical giant now projects $13.5 billion in revenue for the quarter, sparking concerns over the performance of its blockbuster weight-loss and diabetes drugs, Mounjaro and Zepbound.
As of the market close on January 14, Eli Lilly’s stock was trading at $744.91, reflecting a one-day loss of over 6.5%. On the five-day chart, the stock remains down by 2.85%.
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The company’s weaker outlook also weighed on other companies in the GLP-1 drug market, with Viking Therapeutics (NASDAQ: VKTX) experiencing a 12% drop and Novo Nordisk (NYSE: NVO) shares declining by over 4%.
Revised guidance and missed expectations
The company now projects full-year 2024 revenue at $45 billion, slightly below its prior guidance of $45.4 billion to $46 billion announced in October.
While this still represents a 32% increase from the previous year, it has failed to meet Wall Street’s expectations.
For Q4 2024, Lilly now expects worldwide revenue to be approximately $13.5 billion, up 45% year-over-year, including $3.5 billion from Mounjaro and $1.9 billion from Zepbound.
Looking ahead, the company projects 2025 revenue between $58 billion and $61 billion, implying 32% growth at the midpoint compared to its revised 2024 expectations.
Eli Lilly CEO Dave Ricks attributed the weaker-than-expected results to slower growth in the U.S. incretin market, which, while expanding 45% year-over-year, fell short of the company’s projections for faster acceleration.
Additionally, lower-than-expected channel inventory at year-end further weighed on its fourth-quarter performance.
“While the U.S. incretin market grew 45% compared to the same quarter last year, our previous guidance had anticipated even faster acceleration of growth for the quarter. That, in addition to lower-than-expected channel inventory at year-end, contributed to our Q4 results.” – Dave Ricks
Demand dynamics and market expansion
Eli Lilly has been heavily investing in scaling up production of its incretin-based drugs, including Mounjaro and Zepbound, which target diabetes and obesity.
The company plans to increase its sellable doses by 60% in the first half of 2025 compared to the same period in 2024.
Additionally, the FDA’s recent confirmation of the resolution of a tirzepatide shortage, the key active ingredient in these drugs, provides much-needed relief for supply constraints.
Moreover, in a recent interview, CEO Dave Ricks highlighted significant global growth opportunities in markets such as Mexico, Brazil, and China. He also outlined plans to launch oral GLP-1 drugs aimed at improving accessibility and broadening the impact of the company’s offerings.
Beyond addressing weight management, Eli Lilly is focusing on chronic disease prevention by pursuing new indications for conditions like heart failure, sleep apnea, and hypertension, which align with healthcare priorities worldwide.
Analyst outlook remains positive
Despite two consecutive quarters of revenue shortfalls, analysts maintain a positive outlook for Eli Lilly’s long-term potential.
Leerink Partners analyst David Risinger anticipates a strong rebound in the company’s financial performance in 2025, driven by advancements in its drug pipeline, including the highly anticipated Phase 3 results for its oral GLP-1 drug, orforglipron.
As Eli Lilly works to address current challenges, its strong pipeline and global expansion strategy remain key to its recovery and future growth.
Featured image via Shutterstock
