Eli Lilly stock plunges after pharmaceutical giant misses estimates, cuts profit forecast – NBC 5 Dallas-Fort Worth

• Eli Lilly missed third-quarter profit and sales expectations on Wednesday, weighed down by disappointing sales of its blockbuster weight-loss drug Zepbound and diabetes drug Mounjaro.
• The drugmaker also lowered its full-year adjusted profit forecast to a range of $13.02 to $13.52 per share.
• Soaring demand for injectable weight-loss and diabetes drugs has forced both Eli Lilly and its main rival Novo Nordisk to invest billions to expand production capacity.

Eli Lilly on Wednesday missed third-quarter profit and sales expectations, weighed down by disappointing sales of its blockbuster weight-loss drug Zepbound and diabetes drug Mounjaro, and cut its adjusted full-year profit forecast.

The company's shares fell more than 12% in morning trading. Shares of its main rival Novo Nordisk fell over 3%.

Eli Lilly now expects full-year adjusted earnings between $13.02 and $13.52 per share, down from its previous forecast of $16.10 to $16.60 per share. The drugmaker cited a $2.8 billion charge recorded in the third quarter related to its acquisition of intestinal drug maker Morphic Holding that hurt its results.

Eli Lilly also cut the high end of its revenue forecast for the year and now expects revenue between $45.4 billion and $46 billion. The company's previous forecast called for sales of up to $46.6 billion.

Here's what Eli Lilly reported for the period ending Sept. 30 compared to Wall Street's expectations, based on an analyst survey by LSEG:

• Earnings per share: $1.18 adjusted vs. $1.47 expected
• Revenue: $11.44 billion versus expected $12.11 billion

The September period was Zepbound's third full quarter in the US market after the company received approval from regulators almost a year ago. According to StreetAccount, the weekly capital injection brought in revenue of $1.26 billion in the period, less than the $1.76 billion expected by analysts.

Meanwhile, Mounjaro reported third-quarter revenue of $3.11 billion, more than double the same period last year. However, analysts expected sales of $3.77 billion for the diabetes treatment, according to StreetAccount.

Demand in the U.S. far exceeded supply last year for Lilly's incretin drugs such as Zepbound and Mounjaro. Both treatments mimic certain gut hormones to curb a person's appetite and regulate their blood sugar.

The popularity of these injectable drugs has forced both Eli Lilly and Novo Nordisk to invest billions to increase production capacity for these treatments.

Eli Lilly's supply problems began to ease earlier this year. On Wednesday, the Food and Drug Administration's drug database said all doses of Zepbound and Mounjaro were available in the U.S. after prolonged shortages. Still, the agency warns that patients may not always be able to fill their prescription for these medications immediately at a particular pharmacy.

In an interview with CNBC, Eli Lilly CEO David Ricks said that Zepbound and Mounjaro's third-quarter performance was “not a function of supply.” The company said third-quarter drug sales were negatively impacted by inventory declines at wholesalers.

Ricks also said the company has pushed back on plans to promote Zepbound because of its customer service. The drugmaker will begin that effort in November, he said.

“When people go and don’t get their medication, they get very frustrated. That's what they tell us. So we didn’t necessarily want to send more people to do it,” Ricks said.

Eli Lilly has announced that production of incretin drugs will be 50% higher in the second half of 2024 than in the same period last year. And Ricks said Wednesday the company expects “even larger” production capacity expansions at year-end and in 2025.

For the third quarter, Ely Lilly reported net income of $970.3 million, or $1.07 per share, compared to a net loss of $57.4 million, or 6 cents per share, in the third quarter of 2023.

Excluding one-time items related to the value of intangible assets and other adjustments, Eli Lilly earned $1.18 per share in its most recent quarter.

Revenue rose 20% year over year to $11.44 billion.

The FDA's decision to remove tirzepatide, the active ingredient in Zepbound and Mounjaro, from its shortage list has drawn fierce opposition from drug pharmacies that offer tailored and sometimes cheaper alternatives to Eli Lilly's brand-name drugs. Pharmacies that make drugs are asking the FDA to reconsider its decision as both Eli Lilly and Novo Nordisk seek to crack down on unapproved versions of their best-selling drugs.

Ricks told CNBC that the company agrees with the FDA that there is no longer a shortage of Zepbound and Mounjaro, adding, “We have inventory.” He said compounded versions of Eli Lilly's brand-name drugs are not regulated by the FDA , raising questions about their safety and effectiveness.