Eli Lilly & Co. (NYSE: LLY) experienced a sharp decline in its stock price, dropping over 6% on Tuesday, following its revised guidance for the fourth quarter of 2024. The pharmaceutical giant announced revenue expectations of $13.5 billion, falling short of Wall Street consensus estimate of $14 billion by $500 million. Despite the miss, this figure reflects a significant 45% year-over-year growth from the same period in 2023.
Revised Guidance and Market Reaction
Lilly’s initial guidance projected revenue between $13.9 billion and $14.5 billion, making the updated figure a notable downward revision. For the full year 2024, however, the company reaffirmed its confidence, projecting revenue of $45 billion, a 32% increase compared to 2023.
CEO David Ricks attributed the revision to a slower-than-expected acceleration in the U.S. incretin market, combined with lower-than-anticipated year-end channel inventory. He emphasized the company’s ongoing efforts to expand manufacturing and ensure consistent supply across all doses of tirzepatide products.
Performance of Blockbuster Drugs
Eli Lilly’s flagship GLP-1 receptor agonist drugs, including Mounjaro for diabetes and Zepbound for weight loss, also underperformed relative to expectations. The company estimates Q4 sales of $3.5 billion for Mounjaro and $1.9 billion for Zepbound, both falling below consensus figures.
However, prescription data from IQVIA, analyzed by JPMorgan, reveals significant growth in demand for these treatments. Zepbound’s year-over-year weekly prescriptions surged 241%, while Mounjaro’s prescriptions increased by 51% during the quarter, suggesting strong market interest despite short-term inventory challenges.
Analyst Perspectives and Long-Term Outlook
Market analysts expressed mixed reactions to the announcement. Leerink Partners’ David Risinger acknowledged the second consecutive quarter of disappointing results but highlighted potential catalysts for recovery, including Phase 3 results for Lilly’s oral GLP-1 candidate, orforglipron. Similarly, JPMorgan’s Chris Schott noted that while Q4 dynamics presented a headwind, the focus would likely shift to the continued prescription ramp-up and 2025 guidance.
Lilly’s recently issued 2025 projections anticipate substantial growth, with revenue forecasted between $58 billion and $61 billion, a midpoint that exceeds analysts’ expectations.
Growth in the Incretin Market
Despite the revised outlook, Eli Lilly continues to hold a dominant position in the rapidly expanding incretin market, which grew 45% year-over-year in the U.S. during Q4. The company is also heavily investing in its pipeline, with the Phase 3 trial for orforglipron being closely monitored as a potential game-changer in the weight-loss and diabetes treatment space.
What Lies Ahead
With full fourth-quarter earnings and detailed 2024 financial results set for release on February 6, investors and analysts will be watching closely for updates on Lilly’s blockbuster drugs, pipeline progress, and strategies to regain market momentum.
