Although Eli Lilly's second-quarter financial report blew past analyst estimates on several fronts, prompting the pharma to raise its guidance, uninspiring data for its oral obesity hopeful orforglipron overshadowed an otherwise positive financial quarter, sinking the company's shares by about 14% on Thursday. Lilly's overall sales in the three-month period were $15.6 billion, up 38% year-over-year and beating analyst estimates of $14.7 billion, with results driven by volume growth for its tirzepatide drugs, Zepbound and Mounjaro. Both outperformed expectations, with Zepbound surging 172% to $3.4 billion, while Mounjaro posted $5.2 billion, a gain of 69%. Analysts had expected the drugs to generate about $3 billion and $4.7 billion, respectively. "Tirzepatide…will likely become the bestselling drug in the industry in its third year in the market," CEO David Ricks, "and we've got a lot more coming in the pipeline." However, CVS Health's decision earlier this year to exclude Zepbound from its preferred coverage list as of July 1 has "caused significant disruption" to patients, remarked Chief Financial Officer Lucas Montarce. "While it's still early, we have seen this decision negatively impact Zepbound prescriptions during July, and expect it to be a headwind to the rate of volume growth in Q3." In other key products, second-quarter sales for Lilly's breast cancer treatment Verzenio increased 12% to $1.5 billion. Ebglyss, its therapy for atopic dermatitis, generated $87 million and Alzheimer's disease drug Kisunla posted $49 million. The company raised its sales outlook for the year and now expects between $60 billion and $62 billion, up from a prior range of $58 billion to $61 billion. In addition, 2025 profit is projected to reach $21.75 to $23 a share, up from $20.78 to $22.28 per share. Warning about 'price controls' Ricks also weighed in on some of the drug pricing reforms pushed by President Donald Trump, saying that while he agreed that medical research costs ought to be shared more equitably across developed countries, "it's also true that the US pharmaceutical market has significant defects which shift cost to consumers and increase red tape." Last week, Trump issued letters to 17 major pharmaceutical companies, urging them to lower US drug prices to align with international benchmarks by September 29, or face the use of "every tool in our arsenal" to combat what he called "abusive drug pricing practices" harming American families. However, Ricks called for more nuance. "Negotiated prices in Europe come with broad access, low patient co-pays and without administrative hurdles like prior authorisations. There are also no intermediaries that distort prices, and hospitals do not seek profit by selling medicines and marking them up," the CEO said. "If we import foreign price controls and insert them into a US system that isn't built to function for patients, we risk embracing the worst of two worlds — the low productivity and output of Europe's biopharma sector with the high out-of-pocket and distorted prices of the US insurance market." Culled programmes On the R&D front, Lilly said it also discontinued two Phase II programmes, a KV1.3 antagonist for psoriasis, and mazisotine, a non-opioid SSTR4 agonist for pain that it had licensed from Centrexion in 2019 for $47.5 million upfront. A pair of Phase I programmes have also been axed: an itaconate mimetic in immunology and a SCAP siRNA in metabolic dysfunction-associated steatohepatitis.
