Tuesday, 5 November 2024 Reading time : 2 minutes

Equities in Eli Lilly remain under pressure after the US pharmaceutical giant reported disappointing quarterly results last week. Since then, the shares have lost more than 10% (as of November 4, 2024, total return) and are currently trading at around USD 806.00. The S&P 500 is down about 2% over the same period. 

One of the disappointments, as reported by Reuters, was unexpectedly weak sales growth for the company's popular diabetes and weight-loss drugs. Eli Lilly has two blockbusters in this segment, Mounjaro (diabetes) and Zepbound (weight loss), competing with Danish market leader Novo Nordisk (Ozempic and Wegovy).

After the boom in appetite suppressants sent Eli Lilly's shares up by as much as 55% this year, the missed sales forecasts caused a setback. However, demand for weight-loss products remains strong. In the US, an average of 140,000 Zepbound prescriptions have been filled per week in the third quarter, compared to 93,000 in the second quarter, according to data provider Iqvia.

Drug wholesalers appear to have been able to draw on their inventories in recent months to meet demand. Sales in the third quarter were negatively impacted by the reduction in wholesaler inventories,' Eli Lilly said in its quarterly report. This represents a significant change in the market environment, as in the first half of the year pharmaceutical companies were struggling to meet demand, leading to shortages. Eli Lilly and Novo Nordisk have since expanded their capacities. With success, it seems, as Eli Lilly says it has been able to catch up with orders of wholesalers.

Eli Lilly has announced that it will launch advertising campaigns for Zepbound in the coming weeks in a bid to boost demand. Until now, the company has held back on marketing and focused on building inventory in the US, CEO David Ricks told CNBC. Zepbound has been available in the US for about a year. The coming months will show whether the marketing efforts are successful and the disappointing third quarter was just a blip. 

9.50% p.a. Reverse Convertible on Eli Lilly
Barrier: 75%
Valor: 139 433 671

Indicative trems

 

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