Eli Lilly drops, sending Novo lower after Q3 miss

Eli Lilly (NYSE:LLY) shares fell ~9% in the premarket on Wednesday, sending ADRs of its rival Novo Nordisk (NVO) lower after the U.S. drugmaker missed Street forecasts with its Q3 2024 financials, as sales from its new GLP-1 class of weight loss drugs disappointed.

Despite a ~20% YoY increase, LLY’s (NYSE:LLY) Q3 revenue of $11.4B missed analysts’ estimates by $680M as sales from its GLP-1 medicines, Mounjaro and Zepbound, collectively known as tirzepatide, fell short of Street forecasts.

Mounjaro, indicated for diabetes, added $3.1B to the topline from $1.4B in the prior-year period compared to $3.6B projected by analysts, according to Bloomberg data. Meanwhile, LLY’s weight loss therapy Zepbound brought $1.3B, missing $1.6B in the consensus.

“While the growth of Mounjaro and Zepbound is impressive, we are equally proud of the 17% growth in non-incretin revenue,” CEO David Ricks said as LLY’s diabetes therapy Trulicity, a non-GLP-1 product, added $1.3B, exceeding $1.2B in the consensus despite a $22% YoY drop.

However, Eli Lilly’s (LLY) gross margin improved to 81% in Q3 compared to 80.4%, and its non-GAAP earnings per share expanded to $1.18 from $0.10 in the prior-year quarter.

However, the company trimmed its adjusted earnings per share outlook for 2024 to $16.10-$16.60 from $13.02-$13.52, compared to $13.45 in the consensus, and updated its revenue outlook to $45.4B-$46.6B from $45.4-$46.0, indicating a cut in the midpoint.

Commenting on the report, Seeking Alpha analyst BioCGT Investor said the weight loss duopoly of LLY and NVO is expected to face strong competitive headwinds from 2026. “However, the company has been investing part of its profits on manufacturing facilities, R&D, and AI-powered drug discovery, which provides further upside potential beyond GLP-1 drugs,” BioCGT Investor added.