Eli Lilly Misses Wall Street’s Revenue Expectations in Q3

Eli Lilly missed Wall Street estimates for third-quarter profit on Wednesday, October 30th, hurt by higher manufacturing costs and a $2.8 billion acquisition-related charge, sending the U.S. drugmaker’s shares down more than 10 percent in premarket trading.

The setback is due to the fact that a significant part of the supply of diabetes and weight-loss drugs from Big Pharma remained in warehouses, which implies a 180-degree turn for the company after months of struggling to meet the high demand for these drugs.

The American laboratory posted a net profit of $970.3 million in the third quarter of the year, compared to losses of $57.4 million recorded in the same period in 2023.

Eli Lilly’s sales between July and September reached $11.44 billion, 20.4% more than a year earlier, with a growth of 46% in the United States, up to $7.81 billion, but a decline of 12% internationally, with $3.63 billion, due to the adverse effect of the exchange rate.

Eli Lilly has lost $1 billion in market value

Both its weight-loss drug Zepbound and diabetes treatment Mounjaro have been dealing with high demand that has led to shortages, but last quarter Eli Lilly said it had ramped up production and was able to fill backorders at wholesalers. Now the drugmaker’s drugs are no longer in short supply and distributors are working on supplies .

Drug wholesalers, or distributors, buy medications like Zepbound from manufacturers and sell them to hospitals, clinics, pharmacies, and other healthcare providers.

Lilly CEO David Ricks told CNBC that there was an oversupply of the drugs, but that the company had not yet begun advertising Zepbound and had postponed international launches to focus on building inventory in the United States . “We have not been stimulating demand in the way that we had originally planned,” Ricks said.

Eli Lilly shares fell nearly 12%, slashing $1 billion from the Indianapolis-based drugmaker’s market value.

Mounjaro sales rose to $3.11 billion, while Zepbound generated $1.26 billion, which Eli Lilly said reflected continued strong demand. Analysts had expected sales of $4.2 billion for Mounjaro and $1.69 billion for Zepbound for this quarter , according to Lseg data. The drugs are expected to generate a combined revenue of $19 billion in 2024.

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(Featured image by  Marek Studzinski via Unsplash)

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