Eli Lilly and Co (NYSE:LLY) shares fell as much as 7.7% at the open on Thursday after the drugmaker cut its 2025 profit forecast, overshadowing booming sales of its blockbuster weight-loss drugs.
The pharmaceutical giant reported a 45% year-over-year jump in first-quarter revenue to $12.73 billion, slightly above Wall Street expectations, driven by surging demand for its GLP-1 drugs Mounjaro and Zepbound. Adjusted net income rose 29% to $3 billion.
Still, Lilly trimmed its full-year 2025 earnings outlook to a range of $20.78 to $22.28 per share, down from its prior forecast of $22.50 to $24 and below analysts' average estimate of $22.43. The company cited charges related to its acquisition of in-process research and development in the first quarter.
Despite reaffirming its revenue guidance of $58 billion to $61 billion for 2025 and projecting continued strong gross margins, investors appeared concerned by the lowered profit target and increasing competition in the weight-loss market.
Starting July 1, CVS will expand access to Novo Nordisk’s rival drug Wegovy, designating it as the preferred and more affordable weight-loss option over Eli Lilly’s Zepbound in its Caremark plans.
Sales of Zepbound, which launched in late 2023, reached $2.31 billion in the first quarter, in line with estimates. Mounjaro sales more than doubled from a year ago to $3.84 billion.
"We had a solid start to the year with 45% revenue growth led by Mounjaro and Zepbound," CEO David Ricks said in a statement. "Our pipeline continues to deliver, and we are scaling manufacturing to meet growing global demand."
Gross margin for the quarter rose to 83.5% on an adjusted basis. R&D expenses increased 8% to $2.73 billion, or 21.5% of revenue.