Fat Bubble Popped: Lilly Shares Dive On Disappointing Weight-Loss Drug Sales

Eli Lilly & Co's shares plummeted in premarket trading after the company's third-quarter sales of its weight-loss drug fell short of Wall Street's expectations. The company cited 'inventory issues' as the reason for the shortfall, but it appears that Lilly overstocked its GLP1s to capitalize on the anti-obesity drug craze, only to find that demand fizzled in the quarter. The high cost of the drugs and limited insurance coverage likely contributed to the decline in demand. Lilly reported third-quarter revenue of $11.4 billion, a 20% increase from the previous year, but missed the Bloomberg Consensus of $12.18 billion. The company's weight-loss drug Zepbound generated $1.26 billion in revenue, while Mounjaro brought in $3.11 billion, both of which fell short of analyst expectations. Lilly has lowered its full-year sales guidance to between $45.4 and $46 billion, down from its previous estimate of $46.6 billion. The company has also reduced its adjusted earnings per share guidance to $13.02 to $13.52, down from $16.10 to $16.60. Lilly's shares have dropped about 10.25% in premarket trading, which could mark the company's largest single-day drop since October 2008 if losses surpass 10.51%. The decline in demand for Lilly's weight-loss drugs has been visible for months, with the FDA recently stating that the company's weight-loss drugs are no longer in shortage in the US. Lilly is now selling vials of its weight-loss drug Zepbound to patients for as little as $399 a month, a significant decrease from its previous price.