Eli Lilly (LLY) shares plunged 14.63% in intraday trading on Thursday after the pharmaceutical giant released disappointing late-stage trial data for its experimental oral weight loss drug, orforglipron, overshadowing strong second-quarter results and raised full-year guidance.
The Phase 3 ATTAIN-1 trial showed that orforglipron helped patients lose an average of 12.4% of their body weight over 72 weeks, falling short of Wall Street expectations of around 15% weight loss. This result also lagged behind the 14-15% weight loss demonstrated by rival Novo Nordisk's injectable drug Wegovy in previous studies.
Despite the setback, Eli Lilly reported impressive Q2 financial results. Revenue surged 38% year-over-year to $15.56 billion, beating analyst estimates of $14.67 billion. The company's key products, Zepbound and Mounjaro, drove this growth with combined sales of over $8.5 billion. Adjusted earnings per share reached $6.31, up from $3.92 a year ago and surpassing the consensus estimate of $5.59.
In light of the strong performance, Eli Lilly raised its full-year 2025 guidance. The company now expects revenue between $60 billion and $62 billion, up from the previous forecast of $58 billion to $61 billion. Adjusted earnings per share guidance was also increased to $21.75-$23.00 from $20.78-$22.28.
However, investors seemed to focus more on the orforglipron trial results, viewing them as a potential setback in Eli Lilly's competition with Novo Nordisk in the rapidly growing weight loss drug market. The oral medication was seen as a key product to expand Eli Lilly's presence in this lucrative market, estimated to reach $95 billion by 2030.
As Eli Lilly shares tumbled, Novo Nordisk's stock rose, with analysts suggesting that the Danish company's position in the obesity treatment market may be more secure than previously thought. Eli Lilly maintains that it will submit orforglipron for regulatory review by year-end, emphasizing that the drug met its primary and secondary endpoints in the trial.
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