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Eli Lilly and Co. shares dropped more than 14% after the company released its second-quarter financial results and what some analysts see as “disappointing” data regarding the latest trials of its weight-loss pill.
The Indianapolis-based pharmaceutical giant beat analysts’ expectations across the board, reporting revenue of $15.6 billion for the second quarter, up 38% compared to the same period a year ago.
Reported earnings per share was more than $6, above the $5.61 per share expected by analysts, according to Zacks.
The company also increased its 2025 revenue guidance to $60 billion to $62 billion, up from $58 billion to $61 billion, citing the “strength of underlying business and updated foreign exchange rate expectations.”
Second-quarter revenue for the company’s diabetes drug, Mounjaro, was $5.2 billion, up 68% year-over-year. For the same period, Zepbound, approved for weight loss, grew 172%, to $3.4 billion.
Still, the company’s share prices tumbled in the hour after the earnings release, falling more than 11%, to $664 per share, by 7:20 a.m. As of 1:20 p.m., they were down 14.25%, to $640 per share.
Orforglipron release raises questions
Topline results from the latest Phase 3 study of its weight-loss pill, orforglipron, were “disappointing,” according to more than one analyst on Thursday morning’s investors call.
Along with its earnings release, the drugmaker detailed results from its ATTAIN-1 study of its pill-form GLP-1. The study included 3,127 adults with obesity, or who were overweight and had a weight-related medical problem that was not diabetes.
In the study, users on the highest dose (36 milligrams) saw an average weight loss of 27.3 pounds, compared to 2.2 pounds for participants given the placebo, according to the company. About 60% of participants receiving orforglipron at the highest dose saw a total body weight reduction of at least 10%.
The company also reported that 5% of people on the lowest dose (6 milligrams) discontinued due to adverse side effects, including nausea, constipation, diarrhea and vomiting, as did 10% of participants given the highest dose. This is an increase compared to the results of its ACHIEVE-1 study, released earlier this year, which saw 8% discontinuation among those on the highest dose.
And compared with injectables like Lilly’s Zepbound or Novo Nordisk’s Wegovy, orforglipron resulted in less weight loss over time. A 72-week study of Zepbound found that participants on the highest dose lost an average of 48 pounds. A 68-week study involving nearly 2,000 participants found that people taking Wegovy lost 35 pounds, or around 15% weight loss.
David Ricks, Lilly chair and CEO, said in a Thursday morning call that the total results for the study of orforglipron, including its effects on blood pressure, cholesterol and information, left him feeling “encouraged.”
“Our goal from the beginning was to create a medicine that has a clinical profile consistent with approved GLP-1s, while offering the convenience of a once-daily pill and the production flexibility of small-molecule chemistry to meet global demand,” he said.
Ricks said the drug’s overall safety profile was consistent with injectable GLP-1s and that the company plans to submit the drug for regulatory approval by the end of the year.
As these weight-loss drugs have skyrocketed, increasing concerns have been raised regarding their safety and side effects.
More than two dozen lawsuits were filed in the last month by people claiming they experienced severe adverse side effects while taking these drugs. Also named as a defendant in several of those suits is rival Novo Nordisk.
The complaints claim that while Lilly and Novo Nordisk have acknowledged the gastrointestinal side effects of these medications, they have allegedly downplayed the “nature, duration, extent, and seriousness” of them and have failed to warn about other adverse effects.
Novo Nordisk also released its second quarter results this week, boasting profit of more than $4 billion. Per-share earnings slightly beat analysts’ expectations, coming in at 97 cents. Its shares were up more than 12% in the premarket Thursday.
CVS changes may affect Q3 results
Lilly’s stocks similarly plunged following the release of its first-quarter financial results, which were timed with an announcement from CVS Health, the nation’s largest pharmacy benefits manager, that it would list Novo Nordisk’s Wegovy on its standard formulary, excluding Zepbound.
Lilly CFO Lucas Montarce said Thursday that the effects from this change are going to be more impactful in the third quarter.
“While it’s still early, we have seen this decision negatively impact Zepbound prescriptions during July, and expect it to be a headwind to the rate of volume growth in Q3,” he said.
Ilya Yuffa, executive vice president and president of Lilly USA and global customer capabilities, said the change has already resulted in a decrease of several hundred thousand total prescriptions, total prescriptions, what is commonly shorthanded to TRx. However, that loss pales in comparison to overall growth.
“Overall in the context of growing 1.7 million TRx, we view—and when you look at July TRx as a proxy, where it’s, on average, it’s back to around May average TRx—we see continued growth and very good performance across all segments for Zepbound, both in covered as well as our cash-pay market,” Yuffa said.
Lilly CEO responds to Trump call for pricing reform
Last week, President Donald Trump sent a letter to Lilly CEO Ricks and more than a dozen other drug manufacturers calling on them to heed an executive order signed in May to “stop global freeloading and guarantee that Americans pay the same prices enjoyed by other developed nations.”
In his letter, posted to X (formerly Twitter), Trump demanded Lilly and other manufacturers take the following four steps, with a Sept. 29 deadline: extend most-favored-nation, or MVN, pricing to Medicaid; guarantee MFN pricing for newly launched drugs; take steps to return international revenues to American patients and taxpayers; and participate in direct-to-consumer and/or direct-to-business distribution models.
Ricks responded to the letter in Thursday’s call, saying that while the company supports lowering costs for consumers, “the U.S. pharmaceutical market has significant defects,” including “intermediaries that distort prices.”
He also noted that Lilly offers direct-to-consumer access to its drugs via its LillyDirect and self-pay programs, including a single, 5-milligram dose of Zepbound priced at $499.
“If we import foreign price controls and insert them into a U.S. system that isn’t built to function for patients, we risk embracing the worst of two worlds: the low productivity and output of Europe’s biopharma sector, with the high out-of-pocket and distorted prices of the U.S. insurance market,” Ricks said.
The Indiana Lawyer’s Maura Johnson contributed.
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