Zepbound Miss Hits Eli Lilly Shares: What’s Behind the Slump?

Eli Lilly stock fell more than 5% after the release of its first-quarter 2025 earnings, which, even though they exceeded overall revenue and profit estimates, showed that sales of its anti-obesity pill, Zepbound, came in below analysts' expectations.

The drugmaker posted adjusted earnings of $3.34 per share on revenue of $12.73 billion, topping analyst forecasts of $3.26 per share and $12.67 billion in revenue. 

The performance was led primarily by strong sales of its diabetes medication, Mounjaro, which had sales of $3.84 billion, as expected. But Zepbound, Lilly's obesity medication, generated $2.31 billion, short of the expected $2.36 billion.

CVS Health's Coverage 

Investor worries were also amplified by CVS Health's news to drop Zepbound from its list of reimbursable items from July 1, opting for Novo Nordisk's competing drug, Wegovy, instead, citing better pricing. 

This move adds further pricing pressure in the competitive GLP-1 weight-loss space, even as Zepbound had already surpassed Wegovy in prescriptions as of April.

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Revised Profit Outlook 

Against this backdrop, Eli Lilly has lowered its full-year profit guidance, citing deal-related expenses and external trade uncertainty, which may involve tariffs. The company now expects adjusted earnings per share to be between $20.78 and $22.28, lower than the earlier guidance of $22.50 to $24.00.

Global Obesity Drug Market 

The World Health Organization is set to approve the use of weight-loss medications such as Zepbound and Wegovy for the treatment of obesity in adults, a major change in global health policy. The organization has also raised concerns about the availability and affordability of these treatments in low- and middle-income countries.

Although Eli Lilly remains at the forefront of the GLP-1 weight-loss medication market, the recent Zepbound sales disappointment and heightened competitive pressures highlight the difficulties the company is having in sustaining its market share.