Lilly trims sales forecast on weaker obesity/diabetes growth

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Lilly trims sales forecast on weaker obesity/diabetes growth

Eli Lilly has revised its revenue forecast for 2024 after seeing weaker-than-expected growth for its diabetes and obesity therapies – but still said sales rose around a third over the prior year.

The company expects revenues of $45 billion in 2024, which is around $400 million lower than its prediction at the end of the third quarter, after its incretin-based medicines for diabetes and obesity – Mounjaro and Zepbound (both tirzepatide) – came in below expectations in the last three months of the year.

Mounjaro brought in $3.5 billion in the period, while Zepbound added $1.9 billion to the tally, showing an advance on the $3.1 billion and $1.3 billion reported with the drugs in the third quarter, but at a lower growth rate than in previous quarters.

The slowdown sparked a more than 6% decline in Lilly's share price, even though the group predicted another 32% increase in revenues this year to somewhere between $58 billion and $61 billion.

"While the US incretin market grew 45% compared to the same quarter last year, our previous guidance had anticipated even faster acceleration of growth for the quarter," said Lilly's chief executive, David Ricks.

Ricks also attributed the slowdown to a lower-than-expected amount of the drugs in stock at the end of the year and changes to Medicare Part D insurance policy in the US that limited prescriptions to one per month and, in comments to the JP Morgan Healthcare Conference this week, he said there was no indication that demand for incretin medicines is lessening.

Ricks further noted that Lilly is continuing to make progress on a multibillion-dollar investment programme in manufacturing, which has ended shortages in the supply of tirzepatide in the US across all doses.

"2024 was a pivotal and highly successful year for Lilly, and we expect to continue our momentum in 2025 with strong financial and operational performance," continued Ricks.

"Sales of Mounjaro and Zepbound posted robust sales growth in Q4, and we expect a continuation of that trend into 2025. We'll also bring additional manufacturing capacity online and expect to produce at least 60% more saleable doses of incretins in the first half of the year compared to the first half of 2024."

Analysts at JP Morgan recently doubled their predictions for the class to $71 billion within the next 10 years, with Novo Nordisk and Lilly taking 45% apiece amid what they said is a "paradigm shift" in the way that obesity and cardiovascular disease are managed with a "weight-centric" treatment approach.

Lilly is scheduled to publish its full fourth-quarter results and 2025 guidance on 6th February.