Eli Lilly reported better-than-expected first-quarter results Thursday, powered by surging demand for its weight loss and diabetes treatments.
However, shares dropped 11.7% as the company cut its profit outlook for the year. It also faced a setback in drug coverage from a major pharmacy benefit manager.
Adjusted earnings for the quarter were $3.34 per share, beating $3.26 expected. Revenue exceeded expectations at US$12.73 billion, ahead of $12.67 billion expected. The gains were fuelled by the blockbuster performance of two injectable drugs - Mounjaro and Zepbound.
Sales of Mounjaro, a diabetes medication, soared 113% year over year to $3.84 billion.
Meanwhile, Zepbound, Eli Lilly’s obesity drug, generated $2.31 billion in revenue, a more than fourfold increase from the $517.4 million it posted a year ago, shortly after its U.S. launch.
Despite these standout figures, the company revised its adjusted full-year 2025 earnings guidance down to between $20.78 and $22.28 per share, from a prior range of $22.50 to $24.
The downgrade stems from a $1.57 billion charge in the first quarter linked to Eli Lilly’s acquisition of an oral cancer drug from Scorpion Therapeutics.
Eli Lilly reaffirmed its 2025 revenue guidance of $58 billion to $61 billion. The forecast accounts for current U.S. tariffs under President Donald Trump as of 1 May but does not include any additional levies proposed on imported pharmaceuticals.
Added to investor concerns, CVS Health announced that it would remove Zepbound from its standard formulary on 1 July, favouring Novo Nordisk’s Wegovy and Saxenda instead. The move could restrict access to Zepbound for patients relying on insurance coverage, potentially limiting the drug’s growth trajectory.
However, the company continues to face supply constraints amid overwhelming demand for its incretin-based treatments, which mimic gut hormones to suppress appetite and manage blood sugar.
In response, both Eli Lilly and rival Novo Nordisk are investing heavily in expanding their manufacturing capabilities.
At the time of writing, Eli Lilly (NYSE: LLY) stock was trading at US$797.93, up 0.5% from Thursday's close of $794.10. Eli Lilly's market cap stands at US$752.8 billion.
