Eli Lilly LLY cuts 2024 revenue outlook on weight loss drugs

Eli Lilly cut its revenue guidance on Tuesday as it said demand for its weight loss and diabetes drugs would not meet its lofty expectations.

The drugmaker’s shares closed more than 6% lower on Tuesday.

Eli Lilly said it now expects full-year 2024 revenue of about $45 billion. That’s lower than the $45.4 billion to $46 billion the company anticipated in October. The new outlook would still mark a 32% jump in revenue from the prior year.

Eli Lilly has been racing to meet soaring demand for its diabetes treatment Mounjaro and obesity drug Zepbound, investing billions to ramp up its manufacturing capacity of the company’s booming so-called incretin drugs. The efforts appear to be paying off: The Food and Drug Administration in December reaffirmed its decision to declare the U.S. shortage of tirzepatide — the active ingredient in both drugs — over.

In an interview with CNBC on Tuesday, Eli Lilly CEO Dave Ricks said the company has “tons of supply coming online” and “that kind of growth will likely continue.”

He also noted that the company will add more manufacturing capacity and expects to produce at least 60% more sellable doses of its incretin drugs in the first half of the year compared with 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 surveyed by LSEG.

The outlook cut comes as Eli Lilly competes with Novo Nordisk and other, smaller rivals for share of the exploding weight loss and diabetes drug market. Eli Lilly is developing an obesity pill that would be more convenient for patients and easier to manufacture, and Ricks expects it to be approved as soon as early next year.

“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,” 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 Feb. 6.