Eli Lilly Earnings Report: Wall Street Focuses on Zepbound Performance

Investors are closely monitoring Eli Lilly's weight loss drug Zepbound, particularly in light of pricing pressures that have affected Novo Nordisk's competing drug, Wegovy. Following Novo's second-quarter results, which showed significant sales growth for both Wegovy and Ozempic, Eli Lilly's stock experienced a 3% decline. Analysts are questioning whether Lilly will encounter similar challenges in maintaining pricing for Zepbound as Novo Nordisk expands its manufacturing capacity and access to Medicaid patients. Novo Nordisk reported a 24% increase in Wegovy revenue from the first quarter, indicating strong demand for its GLP-1 drugs. Analysts suggest that as production ramps up, prices may decline due to increased volume. However, the premium pricing of Wegovy compared to Zepbound raises questions about whether rebates for Wegovy are influencing overall market prices. Despite these concerns, demand for both companies' medications, which help control appetite and blood sugar, remains robust. Eli Lilly's diabetes treatment, Mounjaro, is also expected to perform well, with a projected 14% increase in volume from the first to the second quarter. Zepbound's volume surged by 59% during the same period. Analysts remain optimistic that both drugs will exceed sales estimates, even if pricing pressures persist. Looking ahead, analysts believe that Eli Lilly holds a competitive advantage with its oral GLP-1 drug, orforglipron. Despite emerging competitors in the obesity treatment space, analysts maintain that Eli Lilly and Novo Nordisk will continue to dominate the incretin market, with projected sales for Mounjaro and Zepbound reaching $27 billion by 2025.