Eli Lilly's Diabetic Earnings Dip: A Temporary Setback
Eli Lilly experienced a significant drop in their share value after their weight-loss and diabetes drugs, Zepbound and Mounjaro, missed Wall Street sales estimates. Despite high demand and increased prescriptions, excess supply and existing inventories led to the discrepancy. Lilly has scaled back profit forecasts due to acquisition charges.
In a surprising turn of events, Eli Lilly's anticipated strong sales for its prominent weight-loss and diabetes medications, Zepbound and Mounjaro, fell short of Wall Street expectations this week. The company's shares plummeted nearly 12%, resulting in a loss exceeding $100 billion in market value.
CEO David Ricks admitted on CNBC that the underperformance was due to an oversupply of the drugs, emphasizing that Lilly hadn't commenced advertising Zepbound as planned. The focus remained on ramping up U.S. inventories and filling back orders at wholesalers, moving away from international launches for the time being.
Despite these setbacks, prescriptions soared, indicating sustained demand. Analyst Chris Schott of J.P. Morgan explained that wholesalers used their existing inventories without placing new orders. Meanwhile, Lilly adjusted its profit forecast downward, citing acquisition-related charges and higher production costs, but experts believe this is just a temporary hitch in a burgeoning market sector.
(With inputs from agencies.)
ALSO READ
Racial Disparities in Access to Novo Nordisk's Diabetes Drugs Among U.S. Veterans
Global Diabetes Epidemic: Alarming Numbers and Treatment Gaps
Global Diabetes Prevalence Surpasses 800M, Urging Urgent Action to Address Growing Epidemic
Global Health: Big Pharma Deals, Diabetes Epidemic, and Opioid Cases
Fitterfly and Ascensia Launch 21-Day Diabetes Management Program