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Weight-loss drugmaker Eli Lilly delivered lower sales and earnings per share than expected in the third quarter, blaming high manufacturing costs and fluctuating inventory levels as it races to keep up with soaring demand for its blockbuster anti-obesity treatments.
Its shares fell by around 10 per cent in pre-market trading after it revised down the upper end of its full-year revenue estimates. It now expects full-year revenues of between $45.4bn and $46bn, down from earlier guidance that put the top end of the range at $46.6bn.
Its third-quarter revenues were $11.4bn, falling short of analyst expectations of $12.2bn. Earnings per share were $1.18, below analyst consensus estimates of $1.47.
Sales of Eli Lilly’s blockbuster weight-loss drug Zepbound were $1.2bn for the quarter, below expectations of around $1.6bn. Mounjaro, a version of the same drug used to treat diabetes, generated $3.1bn in sales for the quarter.
Eli Lilly said “higher inventory levels” at wholesalers at the start of the quarter “negatively impacted” demand for Zepbound and Mounjaro. Meanwhile, it blamed its low profit figures on high manufacturing costs and a $2.8bn research and development charge related to a recent acquisition.
The sharp drop in Eli Lilly’s share price shows how closely investors are watching the fierce battle between the US drugmaker and its Danish rival Novo Nordisk — which owns the diabetes and weight-loss drugs Ozempic and Wegovy — over a market that analysts project could peak at around $130bn a year.
Both drugmakers have pumped tens of billions of dollars into internal and outsourced manufacturing capacity to meet the huge demand for the new class of weight-loss drugs, known as GLP-1s. David Ricks, Eli Lilly’s chief executive, said the drugmaker still delivered a “strong growth quarter”.
Evan Seigerman, an analyst at BMO Capital Markets, said in a note that the “rare miss” for Eli Lilly was “not softness in the underlying business”, adding that “the longer-term thesis appears intact”.
