Eli Lilly's stock fell 10%

Eli Lilly On Wednesday, it missed profit and revenue expectations for the third quarter, due to disappointing sales of its blockbuster weight loss drug Zepbound and diabetes treatment Mounjaro, and cut its full-year adjusted profit guidance.

The company's stock fell as much as 10% in premarket trading before paring some losses. Shares of its main rival, Novo Nordisk, fell about 4% in premarket trading.

Eli Lilly now expects full-year adjusted earnings of between $13.02 and $13.52 per share, down from previous guidance of $16.10 to $16.60 per share. The drugmaker cited a $2.8 billion charge recorded during the third quarter and related to its acquisition of bowel disease drug maker Morphic Holdings as denting its results.

Eli Lilly also lowered the high end of its revenue outlook for the year and now expects sales between $45.4 billion and $46 billion. The company's previous guidance called for revenue as high as $46.6 billion.

Here's what Eli Lilly reported for the period ended Sept. 30, compared with what Wall Street was expecting, based on a survey of analysts at LSEG:

• Earnings per share: $1.18 adjusted vs $1.47 expected
• Revenue: $11.44 billion vs. $12.11 billion expected

September was Zepbound's third full quarter in the U.S. market since receiving approval from regulators nearly a year ago. The weekly injection brought in $1.26 billion in sales for the period, below the $1.76 billion analysts were expecting, according to StreetAccounts.

Meanwhile, Mounjaro posted revenue of $3.11 billion in the third quarter. According to StreetAccount, analysts had expected sales of $3.77 billion for the diabetes treatment.

Demand in the US has outstripped Lilly's supply of incretin drugs, such as Zepbound and Mounjaro, over the past year. Both treatments mimic certain gut hormones to reduce a person's appetite and regulate their blood sugar.

The popularity of this injectable drug has forced both Eli Lilly and its main rival Novo Nordisk to invest billions in expanding manufacturing capacity for the treatment.

Eli Lilly's supply woes began to ease earlier this year. As of Wednesday, the Food and Drug Administration's drug database said all doses of Zepbound and Mounjaro were available in the U.S. after extended shortages. Still, the agency cautions that patients may not always be able to promptly fill their prescriptions for those drugs at a particular pharmacy.

For the third quarter Eli Lilly recorded net income of $970.3 million, or $1.07 per share, compared to a net loss of $57.4 million, or 6 cents per share, in the third quarter of 2023.

Excluding one-time items associated with intangible asset valuation and other adjustments, Eli Lilly earned $1.18 per share for the most recent quarter.

Revenue rose 20% year over year to $11.44 billion.

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