Eli Lilly shares are falling because the drugmaker lowers its sales forecast for demand for weight-loss drugs

Eli Lilly on Tuesday lowered its sales forecast because demand for its weight-loss and diabetes drugs wouldn’t meet its lofty expectations.

Shares of the drugmaker closed greater than 6% lower on Tuesday.

Eli Lilly said it now expects full-year 2024 sales of about $45 billion. That's lower than the $45.4 billion to $46 billion the corporate expected in October. The recent outlook would still represent a 32% year-over-year jump in sales.

Struggling to fulfill rising demand for its diabetes drug Mounjaro and obesity drug Zepbound, Eli Lilly is investing billions to expand its production capability for the corporate's booming so-called incretin drugs. The efforts look like paying off: The Food and Drug Administration reaffirmed its decision in December to declare an end to the U.S. shortage of tirzepatide, the energetic ingredient in each drugs.

In an interview with CNBC on Tuesday, Eli Lilly CEO Dave Ricks said the corporate is “getting tons of deals online” and “that kind of growth is likely to continue.”

He also noted that the corporate will expand its production capability and expects to supply at the least 60% more salable doses of its incretin drugs in the primary half of the yr than in the identical period in 2024.

For the fourth quarter, Eli Lilly expects sales of $13.5 billion. The total includes roughly $3.5 billion for Mounjaro and $1.9 billion for Zepbound.

Wall Street had expected fourth-quarter and full-year revenue of $13.94 billion and $45.49 billion, respectively, in response to analysts surveyed by LSEG.

The outlook cut comes as Eli Lilly competes with it Novo Nordisk and other, smaller competitors for share within the exploding marketplace for weight-loss and diabetes drugs. Eli Lilly is developing an obesity pill that may be more convenient for patients and easier to supply, and Ricks expects it to be approved as early as early next yr.

“While the U.S. incretin market grew 45% in comparison with the identical quarter last yr, our previous forecasts had expected a good faster acceleration in growth for the quarter. This contributed along with lower-than-expected year-end channel inventory levels.” “Our Q4 results,” Ricks said in a statement.

The drugmaker also said it expects revenue of $58 billion to $61 billion in fiscal 2025.

Eli Lilly is expected to report full quarterly results on February 6th.