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(Bloomberg) -- Eli Lilly & Co.’s fourth-quarter revenue fell short of analysts’ estimates as the drugmaker struggled to forecast demand for its popular weight-loss and diabetes shots for the second quarter in a row.
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Demand for Lilly’s obesity and diabetes drugs Zepbound and Mounjaro, which are essentially the same drug, skyrocketed over the past two years as Americans sought them for weight loss. The company has invested more than $20 billion to boost supply, but now it’s facing the problem of having more drug than it thought it needed.
“I’d call it more forecasting precision than market concerns,” Chief Financial Officer Lucas Montarce said Tuesday in an interview with Bloomberg at the JPMorgan Healthcare Conference in San Francisco.
Typically, Lilly sees “a bit of a build” in inventory levels at the end of the year, said Montarce, a long-time Lilly executive who was named CFO in September. But fourth-quarter inventory remained “relatively flat” compared to the previous three months, he said. It’s the second straight quarterly sales miss that the company has blamed on inventory issues, raising concerns about overall sales expectations.
“With the sort of growth the market expects for Lilly, they have very little room for error,” Bloomberg Intelligence analyst John Murphy said.
Shares of the Indianapolis-based drugmaker fell as much as 8.6% Tuesday in New York, their biggest intraday slump since Oct. 30. They had gained 32% in 2024. Shares of weight-loss rival Novo Nordisk A/S lost 3.4% at the close in Denmark.
Overall fourth-quarter sales are expected to be $13.5 billion, Lilly said in a statement of preliminary results, below the $14 billion average estimate of analysts surveyed by Bloomberg. Both Zepbound and Mounjaro came in below projections.
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The revenue miss was “well-telegraphed” by the company, according to Mizuho health specialist Jared Holz. “This remains best story in large-cap pharma near-term.”
The company had said in its third-quarter conference call that wholesalers’ difficulty with stocking a variety of different doses of its vaunted drugs hurt sales by a mid-single-digits percentage.
In an interview at the JPMorgan conference, Chief Executive Officer Dave Ricks said the drugmaker normally sells more product in December, as patients double up on prescriptions ahead of the holidays and deductible resets in January. “But we did not see that,” he said.