Eli Lilly (LLY) Plunges 14% Despite Beating expectations

by MarketNewsData

Eli Lilly shares plunged 14.14% to close at $640.86 despite delivering a strong Q2 2025 beat-and-raise quarter. The drop was driven by disappointing Phase 3 trial results for its oral weight-loss pill, orforglipron, which overshadowed robust injectable GLP-1 sales and higher full-year guidance.

Financial Highlights (Q2 2025):

  • Revenue: $15.56 B (+38% YoY) vs. ~$15.3 B expected
  • Adjusted EPS: $6.31 vs. $5.97 expected
  • GAAP EPS: $5.92
  • Key Growth Drivers: Strong demand for GLP-1 injectables Mounjaro and Zepbound
  • Full-Year 2025 Guidance Raised:
    • Revenue: $60 B–$62 B (prior $58.5 B–$60.5 B)
    • Adjusted EPS: $21.75–$23.00 (prior $20.50–$22.00)

Main Reason for Stock Drop:

  • Orforglipron Phase 3 Results Disappoint:
    • Average weight loss: 12.4% over 72 weeks, below 13–15% Street expectations.
    • Dropout rate: up to 10.3% vs. ~7% for Novo Nordisk’s Wegovy.
    • Analysts cut long-term sales forecasts (e.g., Leerink reduced 2030 est. from $21.6 B to $13.5 B).
    • Raises concerns about competitive positioning in the oral GLP-1 market.

Competitor Stock Moves on the News:

  • Novo Nordisk (NVO): +7–8% — Boosted by expectations that Wegovy and Ozempic will maintain market dominance.
  • Viking Therapeutics (VKTX): +10% — Speculation of increased investor and partnership interest in alternative GLP-1 candidates.
  • Pfizer (PFE): +3–4% — Potential opportunity window for its own obesity drug pipeline.
  • Amgen (AMGN): +2–3% — Gains on improved competitive prospects for its mid-stage candidate.

Market Reaction Summary:
Investors aggressively repriced Lilly’s obesity drug growth outlook. While the core GLP-1 injectable business remains strong, doubts about its oral program diminished the “future growth premium,” leading to the steep sell-off.

Bottom Line:
Lilly remains a dominant player in injectables, but the orforglipron setback hands a competitive narrative advantage to Novo Nordisk and creates openings for smaller biotech and big pharma rivals in the oral obesity drug race.

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