Eli Lilly (ticker: LLY) disappointed investors with its updated full-year earnings guidance after a streak of recent acquisitions. In the third quarter, Lilly reported earnings of 10 cents per share, surpassing analysts’ expectations. However, the company reduced its outlook for full-year earnings to a range of $6.50 to $6.70 per share, down from the previously raised range of $9.70 to $9.90.
The lowered guidance can be attributed to in-process research-and-development charges resulting from Lilly’s recent acquisitions of DICE Therapeutics, Versanis Bio, and Emergence Therapeutics. Despite this setback, Lilly’s chairman and CEO, David A. Ricks, emphasized the positive performance in Q3, particularly the successes of Mounjaro and Verzenio.
Mounjaro, Lilly’s blockbuster weight-loss drug approved for treating Type 2 diabetes, is also anticipated to gain approval as an obesity treatment. This drug has been a significant driver of revenue growth for Lilly, contributing $1.4 billion in Q3— a substantial increase from $187 million during the same period last year.
In light of Novo Nordisk’s recent supply restrictions on some doses, Lilly may have an opportunity to capture a greater market share with Mounjaro. As a result, investors remain optimistic about the prospects for Lilly and its weight-loss drugs. Although Lilly saw a brief decline of over 2% in premarket trading, the stock quickly rebounded and is now down less than 1%.
In conclusion, while Lilly’s revised earnings guidance may have caused initial concerns, investors are looking beyond this setback and focusing on the potential opportunities in the weight-loss drug market.