Why Eli Lilly Shares Plunged
When Eli Lilly (LLY) posted strong quarterly results, the stock fell from $750 to $625.65 by August 8. Shareholders fretted about clinical results from its next-generation obesity drug. Its 37.7% Y/Y revenue growth reaffirms Eli’s fundamental strength.
Eli posted revenue of $15.56 billion. Non-GAAP EPS was $6.31. For 2025, it is guiding EPS of $21.75 to $23.00. Management is confident about the firm’s robust pipeline progress. Ebglyss, Jaypirca, Kisunla, Mounjaro, Omvoh, Verzenio, and Zepbound are all contributors to the 38% revenue growth.
Uptake of Zepbound and Mounjaro, plus the market share growth of incretin, are tailwinds. To compete effectively, the weight loss drug Zepbound is discounted at over 50% from its list price. The insulin drug is 70% off the list price. This should preempt the White House’s demand for drug price cuts.
Ebglyss is a growth driver. This continued to perform well in the atopic dermatitis market, where new patient starts and revenue were strong. Total prescriptions nearly doubled since the first quarter. All three of the largest PBMs (pharmacy benefit managers) provide coverage. This represents 90% of the people who have commercial insurance.
Risk
Investors did not like the results of the oral weight loss pill. It achieved just 12% in weight loss after a year. This increases the attractiveness of Novo Nordisk’s (NVO) drug.
