Only in the crazy sector of metabolic medicines can 32% revenue growth be considered a disappointment. That’s how much Eli Lilly’s revenue grew in 2024, but it was still not as much as the company or investors expected, which had CEO David Ricks trying to assuage investors.
Lilly on Tuesday revised its revenue guidance for the fourth quarter to about $13.5 billion, which is about $400 million less than the company’s previous revenue projection. The company attributed the revision to lower-than-expected sales of tirzepatide, marketed as Mounjaro for type 2 diabetes and Zepbound for obesity.
“It’s always disappointing to miss your own expectations,” Ricks said during a presentation Tuesday at the annual J.P. Morgan Healthcare Conference in San Francisco. “We own that, it’s our job to give good guidance to the street, and we aim to land within that guidance normally. That said, we’re dealing with a business year that is pretty unprecedented in our sector, in terms of size, and scale and growth rate.”
The Lilly metabolic medicines are still tremendous drivers of revenue. The company expects Mounjaro will tally about $3.5 billion in sales for the fourth quarter of 2024 while Zepbound revenue will be about $1.9 billion. The company’s previous fourth quarter revenue guidance was based on expectations of faster revenue growth for the period.
Ricks cited several reasons for the lower-than-expected sales of the incretin mimetics, engineered peptides that work by mimicking gut hormones. December sales usually outperform the rest of the fourth quarter. That did not happen last month for Mounjaro and Zepbound. Ricks said the difference could be changes in Medicare Part D and insurance, keeping patients from doing two prescriptions in the same month. The company also had lower-than-expected amount of the drugs in stock at the end of the year. Ricks dismissed suggestions that the missed guidance indicates a slowdown in adoption of the metabolic medicines.
“We think we’re in the early innings of this,” he said. “There is limits on demand for each category. I think the incretin story, the tirzepatide story, is going to be about unlocking new categories over and over again.”
Beyond revenue growth in diabetes and obesity, Lilly’s strategy includes expanding use of tirzepatide to other indications. In late December, the FDA approved Zepbound as a treatment for obstructive sleep apnea, which represents another potential blockbuster market. Lilly is also studying tirzepatide in cardiovascular indications and the fatty liver disease MASH.
Leerink Partners analyst David Risinger said in a research note that despite the second straight quarter of lower-than-expected revenue figures, he expects Lilly’s 2025 financial performance and pipeline news — specifically the Phase 3 results for oral GLP-1 drug orforglipron — will be encouraging.
Photo: Craig F. Walker/The Boston Globe, via Getty Images
