Eli Lilly Stock Dives Toward Worst Day Since 2000 On Disappointing Earnings, Zepbound Sales

Topline

Drug maker Eli Lilly’s share price plunged Wednesday morning after the company reported worse third-quarter results than expected, especially in its weight-loss drug division, registering a rare misstep for the Wall Street darling.

Key Facts

Shares of Eli Lilly dropped about 14% within 15 minutes of market open, tumbling toward the worst daily percentage decline for the stock since the 31% loss suffered Aug. 9, 2000 and the third-worst day for the company dating back to July 1972.

Wednesday’s dive came as Eli Lilly’s results released at about 7 a.m. EDT were worse than analyst expectations across the board, headlined by its $11.4 billion in Q3 sales (5% below forecasts of $12.1 billion, according to FactSet) and $1.18 earnings per share (23% below forecasts of $1.45).

At the core of the disappointing results were weaker-than-expected revenue from Eli Lilly’s GLP-1 drug tirzepatide sold under the brand names Mounjaro for type 2 diabetes and Zepbound for weight loss.

Sales last quarter for Mounjaro were $3.11 billion, well below estimates of $3.77 billion, and sales for Zepbound were $1.26 billion, below estimates of $1.73 billion, a disappointment of more than 20% for the company’s GLP-1 class.

And perhaps more crucially for investors, Eli Lilly shared guidance for full-year results which were below Wall Street’s consensus, as the company’s $45.4 billion to $46 billion in projected 2024 sales fell short of average forecasts of $46.2 billion and its midpoint guidance of $13.27 adjusted earnings per share was below estimates of $13.42.

What To Watch For

Eli Lilly will host its Q3 earnings conference call at 10 a.m. EDT.

Big Number

$110 billion. That’s about how much of Eli Lilly’s market value was wiped out Wednesday. That’s more than the entire company was worth at the end of 2017, at $93 billion.

Contra

Despite Wednesday’s chilly reaction, shares of Eli Lilly remain up 33% year-to-date, and an eye popping 590% over the last five years. The below-expectation $13.27 profit per share would still be more than 100% year-over-year bottom line growth, indicating the sky is not exactly falling for the pharmaceutical company which also produces medications like diabetes drugs Humilin and Trulicity and erectile dysfunction drug Cialis.