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HomeMarketLilly's ambitious diabetes drug Mounjaro fails to impress in the fourth quarter

Lilly’s ambitious diabetes drug Mounjaro fails to impress in the fourth quarter

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Eli Lilly’s
new Type 2 diabetes treatment Mounjaro may be in high demand, but the drug had a wobbly fourth quarter, with sales coming in far below Wall Street’s expectations. 

Mounjaro, a GIP (glucose-dependent insulinotropic polypeptide) and GLP-1 receptor agonist that received Food and Drug Administration approval in May, brought in $279.2 million in sales in the final three months of the year. The FactSet consensus was $319.3 million. 

“We would have expected somewhat more of an uptick,” SVB Securities analyst David Risinger told investors on Thursday. 

The company’s stock was down 5.8% in trading on Thursday after its overall fourth-quarter performance came in below expectations.

To no surprise, Lilly executives were ready to reassure investors that the company has the manufacturing capacity to handle the ongoing launch of a drug that is essential to its long-term strategy, citing a new factory in North Carolina. 

“Given strong demand for our incretin product, there have been intermittent delays at wholesalers and pharmacies in receiving certain dosage levels of Mounjaro and Trulicity in the U.S.,” Lilly CFO Anat Ashkenazi said during Thursday’s earnings call. 

Lilly is testing tirzepatide — the generic name of Mounjaro — for a range of metabolic conditions, notably obesity. The FDA is currently reviewing that submission, and the drug is expected to be approved sometime this year. By 2027, Mounjaro is expected to bring in $13.7 billion in sales.

Novo Nordisk
which makes a competing therapy, is in a similar position. The success of its glucagon-like peptide-1 (GLP-1) agonist, which has been approved to treat Type 2 diabetes under the name Ozempic and obesity under the name Wegovy, has been stalled by shortages and manufacturing capacity issues.

“The outlook includes an expectation of continued periodic supply constraints and related drug shortage notifications in 2023 across a number of products and geographies,” Camilla Sylvest, head of Novo’s commercial strategy and corporate affairs, said during an earnings call on Wednesday. “This is driven by higher-than-expected volume growth for GLP-1 based products such as Ozempic and temporary capacity limitations at some manufacturing sites.”

Novo said all doses of Wegovy are now available to patients. 

Putting aside dry supply issues, the thing to know about these drugs is they are set to radically change the way some people eat, maintain weight, and lose weight — and the obesity drug maker may be worth $54 billion by 2030, as a result.

Both of the therapies developed by Lilly and Novo are hormones that help the brain recognize what it means to be full, and their effectiveness has rapidly caught the attention of celebrities and the general public alike.

Twitter CEO Elon Musk tweeted in October that he took Wegovy. (He’s also been fasting.) There’s rampant online speculation that already-thin celebrities are using the drug to further lose weight. And Andy Cohen, the Bravo TV host, in September tweeted: “Everyone is suddenly showing up 25 pounds lighter. What happens when they stop taking #Ozempic ?????”

Lilly’s stock is up 28.7% over the past year, while the broader S&P 500
is down 7.9%.


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