The U.S. incretin market is growing by 45%, but not as quickly as Eli Lilly had anticipated, and the drugmaker’s stock is headed for its largest selloff in four years.
Eli Lilly & Co.’s stock was on track for its worst day in over four years Tuesday after the pharmaceutical company reported lower-than-expected fourth-quarter revenue growth, citing slower-than-expected increase in sales of its weight-loss and diabetes medications.
“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,” stated David Ricks, our chief executive officer.
Drugs like Zepbound and Mounjaro from Eli Lilly that treat diabetes and obesity contain incretins like glucagon-like peptide-1, or GLP-1.
In morning trade, the stock (LLY) fell 8.2%, making it the worst-performing SPX in the S&P 500 index. Additionally, it was headed for its largest one-day drop since it fell 9.1% on March 15, 2021.
Novo Nordisk A/S (NVO), the manufacturer of the competing diabetic and obesity medications Ozempic and Wegovy, had a 3.6% decline in its U.S.-listed shares.
The business stated that it anticipates revenue of roughly $13.5 billion for the quarter ending in December, which is less than the $13.93 billion FactSet expectation.
The anticipated revenue total includes $1.9 billion in sales of the weight-loss medication Zepbound, which is below than projections of $2.14 billion, and $3.5 billion in sales of the diabetes medicine Mounjaro, which is less than the FactSet consensus of $4.4 billion.
According to Lilly, the disappointing results were partly caused by a lower-than-anticipated supply at the end of the year.
Due to wholesalers cutting inventories after stockpiling in the previous quarter, Lilly reported lower-than-expected sales of both Mounjaro and Zepbound in its third-quarter report in October.
According to the company, it made further strides in expanding its manufacturing capacity during the fourth quarter, which contributed to an increase in Mounjaro supplies.
According to Ricks, he anticipates “robust” sales growth in 2025 and believes the extra manufacturing capacity will increase the amount of incretin medicine dosages available for sale by at least 60% in the first half of the year.
According to Lilly, the remaining medications “performed within our expectations,” the company reported.
Over the last three months, Lilly’s stock has fallen 21.3%, the S&P 500 has lost 0.3%, and the Health Care Select Sector SPDR exchange-traded fund XLV has lost 9.7%.
