Eli Lilly reported strong second-quarter results with revenue jumping 38% to $15.56 billion and adjusted earnings per share surging 61% to $6.31. However, shares plummeted over 14% due to disappointing data from a key late-stage trial for the weight-loss pill orforglipron. Lilly’s stock is now trading back to levels last seen in early 2024. Sales and earnings beat expectations, leading Lilly to raise its full-year sales and profit outlook. The trial results showed patients lost an average of 12.4% of body weight on the highest dose of orforglipron, falling short of the Street’s expectation of 15%. CEO Davd Ricks defended the trial results, stating that orforglipron is convenient, scalable, and competitive with other GLP-1 drugs. Despite the setback, Lilly still plans to submit data to U.S. regulators by year-end and aims for an official launch next year. Analysts downgraded Lilly shares following the trial, citing concerns over competition from Novo Nordisk’s Wegovy. Lilly’s full-year sales outlook was raised to $60-62 billion, and adjusted earnings per share increased to $21.75-$23.00. Adjusted performance margin guidance was also revised higher to 43-44.5%. Overall, Lilly’s stock is downgraded to a “sell into strength” rating with a price target of $800 per share.

Read more at CNBC: We’re downgrading Lilly and asking ourselves tough questions after its obesity pill letdown