Eli Lilly stock crashed Wednesday after the pharma giant cut its 2024 outlook following a "big" miss for its popular diabetes and weight-loss drugs.
The company's drug, tirzepatide, provides the backbone for diabetes treatment Mounjaro and weight-loss drug Zepbound. In the September quarter, Mounjaro sales rocketed 121% to $3.11 billion. But that missed more bullish forecasts for $3.77 billion, according to FactSet. Zepbound sales came in at $1.26 billion, but lagged calls for $1.73 billion.
Lilly noted in its press release that third-quarter sales in the U.S. "were negatively impacted by inventory decreases in the wholesaler channel." The company estimated that had a mid-single-digit percentage negative impact on sales.
"Although third-quarter results were disappointing, we view the Lilly investment thesis as unchanged since the company is just getting started in commercializing obesity products globally," Leerink Partners analyst David Risinger said in a client note.
But on today's stock market, Eli Lilly stock plummeted 6.3% to 846.83. Shares undercut their 200-day line and the lower edge of a flat base with a buy point at 972.53, according to MarketSurge.
Eli Lilly Stock Dives On Guidance Cut
Across all products, sales advanced 20% to $11.44 billion. That missed analysts' estimate for $12.09 billion. Eli Lilly noted, it sold its schizophrenia and bipolar disorder drug, Zyprexa. Excluding the $1.42 billion Zyprexa generated in the same three months last year, sales climbed 42%.
On an adjusted basis, Lilly earned $1.18 per share, widely missing expectations for $1.45. Leerink's Risinger says the Street's forecast didn't fully include the tax charge Eli Lilly disclosed on Oct. 8.
Though Mounjaro and Zepbound lagged forecasts, revenue from another notable type 2 diabetes treatment, Trulicity, beat expectations. Trulicity sales toppled 22% to $1.3 billion. But analysts called for a lower $1.2 billion. Still, Lilly says Trulicity sales are under pressure due to competition.
For the year, Eli Lilly cut its earnings target to $13.02 to $13.52 per share. The midpoint of Lilly's outlook missed analysts' forecast for $13.42. The company also lowered the higher side of its revenue guidance and now expects $45.4 billion to $46 billion in sales, missing views for $46.24 billion.
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