Eli Lilly experiences a decline in share price after reducing revenue forecast for demand of weight loss drug.

• Eli Lilly lowered its 2024 revenue forecast due to lower-than-expected demand for its obesity and diabetes medications.
• Mounjaro, Eli Lilly's diabetes treatment, is projected to generate approximately $3.5 billion in revenue, while Zepbound, its obesity drug, is expected to bring in about $1.9 billion.
• Dave Ricks, CEO of the company, informed CNBC that there is an abundance of supply currently being produced and that the company plans to increase its manufacturing capacity.

On Tuesday, the company cut its revenue guidance because it predicted that demand for its weight loss and diabetes drugs would not meet its high expectations.

The drugmaker's shares dropped about 6% in early trading Tuesday.

Eli Lilly now anticipates full-year 2024 revenue of approximately $45 billion, which is lower than the previously projected range of $45.4 billion to $46 billion. Despite this, the new outlook represents a 32% increase in revenue from the prior year.

Eli Lilly is investing billions to increase its manufacturing capacity for its popular incretin drugs, Mounjaro and Zepbound, in order to meet the growing demand. The Food and Drug Administration has recently confirmed that the U.S. shortage of tirzepatide, the active ingredient in both drugs, has been resolved.

In a CNBC interview on Tuesday, Eli Lilly CEO Dave Ricks stated that the company has an abundance of supply and this growth trend is likely to persist.

The company plans to increase its manufacturing capacity and anticipates producing 60% more sellable doses of incretin drugs in the first half of 2025 compared to the same period in 2024.

Eli Lilly anticipates $13.5 billion in revenue for the fourth quarter, with $3.5 billion coming from Mounjaro and $1.9 billion from Zepbound.

According to analysts surveyed by LSEG, Wall Street had predicted fourth-quarter and full-year revenue of $13.94 billion and $45.49 billion, respectively.

Eli Lilly is developing an obesity pill that would be more convenient for patients and easier to manufacture, and Rick expects it to be approved as soon as early next year.

Despite the 45% growth of the U.S. incretin market compared to the previous quarter, our previous guidance predicted even faster growth for the quarter. Additionally, lower-than-expected channel inventory at year-end contributed to our Q4 results, as stated by Ricks.

In fiscal 2025, the drugmaker anticipates sales to be between $58 billion and $61 billion.

Eli Lilly is expected to report full quarterly results on Feb. 6.