Eli Lilly Faces Supply Chain Challenges Despite Rising Demand for Weight-loss Drugs

Eli Lilly reported lower-than-expected sales for its weight-loss and diabetes drugs, Zepbound and Mounjaro, as supplies sat in warehouses. The company had previously struggled to meet high demand, but now distributors are working through excess supply. Eli Lilly's shares dropped, while demand continues to rise.

Eli Lilly's sales figures for its prominent weight-loss and diabetes drugs have disappointed Wall Street, with supplies remaining static in warehouses. This marks a significant shift for the Indianapolis-based drugmaker, which previously struggled to fulfill the hefty demand. The company experienced an 8% drop in shares, significantly affecting its market value.

Lilly's weight-loss drug Zepbound and diabetes treatment Mounjaro faced intense demand leading to shortages. However, the company increased production, allowing distributors to manage accumulated stock. CEO David Ricks cited that distribution sales missed the mark partly because resellers chose their stock based on physical and financial restrictions.

Despite prescription increases for Zepbound and Mounjaro, demand stimulation has not occurred as initially planned, impacting sales figures. Analysts note that current inventories are being used without new orders. Lilly lowered its annual profit forecast amid acquisition charges and higher manufacturing costs, acknowledging a 'blip' in marking exponential growth in the weight-loss market.

(With inputs from agencies.)