Eli Lilly on Tuesday lowered its sales forecast because demand for its weight-loss and diabetes drugs wouldn’t meet its lofty expectations.

Shares of the drugmaker closed greater than 6% lower on Tuesday.

Eli Lilly said it now expects full-year 2024 sales of about $45 billion. That's lower than the $45.4 billion to $46 billion the corporate expected in October. The recent outlook would still represent a 32% year-over-year jump in sales.

Struggling to fulfill rising demand for its diabetes drug Mounjaro and obesity drug Zepbound, Eli Lilly is investing billions to expand its production capability for the corporate's booming so-called incretin drugs. The efforts look like paying off: The Food and Drug Administration reaffirmed its decision in December to declare an end to the U.S. shortage of tirzepatide, the energetic ingredient in each drugs.

In an interview with CNBC on Tuesday, Eli Lilly CEO Dave Ricks said the corporate is “getting tons of deals online” and “that kind of growth is likely to continue.”

He also noted that the corporate will expand its production capability and expects to supply at the least 60% more salable doses of its incretin drugs in the primary half of the yr than in the identical period in 2024.

For the fourth quarter, Eli Lilly expects sales of $13.5 billion. The total includes roughly $3.5 billion for Mounjaro and $1.9 billion for Zepbound.

Wall Street had expected fourth-quarter and full-year revenue of $13.94 billion and $45.49 billion, respectively, in response to analysts surveyed by LSEG.

The outlook cut comes as Eli Lilly competes with it Novo Nordisk and other, smaller competitors for share within the exploding marketplace for weight-loss and diabetes drugs. Eli Lilly is developing an obesity pill that may be more convenient for patients and easier to supply, and Ricks expects it to be approved as early as early next yr.

“While the U.S. incretin market grew 45% in comparison with the identical quarter last yr, our previous forecasts had expected a good faster acceleration in growth for the quarter. This contributed along with lower-than-expected year-end channel inventory levels.” “Our Q4 results,” Ricks said in a statement.

The drugmaker also said it expects revenue of $58 billion to $61 billion in fiscal 2025.

Eli Lilly is expected to report full quarterly results on February 6th.

Merck announced Wednesday that it has secured the rights to an experimental weight-loss pill from Chinese drugmaker Hansoh Pharma in a deal value as much as $2 billion.

The oral drug has not yet been tested in humans, and Merck has not specified which diseases it plans to check the drug on first. Still, it increases the drug company's probabilities of capturing a slice of the booming obesity drug market, which some analysts expect to be value greater than $100 billion a 12 months by the early 2030s.

Several other drug manufacturers including Pfizer And Rocheare in search of to develop more practical obesity pills that may compete with the blockbuster injections from Novo Nordisk and Eli Lilly.

Under the agreement, Merck will receive the exclusive worldwide license to develop, manufacture and commercialize Hansoh Pharma's HS-10535, an experimental oral drug that targets a gut hormone called GLP-1. Novo Nordisks The popular weight reduction drug Wegovy and the diabetes drug Ozempic also goal GLP-1 to suppress appetite and regulate blood sugar.

Merck can pay Hansoh $112 million upfront for the rights to the drug, with the potential for a further $1.9 billion in milestone payments and royalties. in line with a press release.

Merck said its fourth-quarter results will include a pretax charge of $112 million, or 4 cents per share.

In the press release, Dean Li, president of Merck Research Laboratories, said the oral drug “has the potential to provide additional cardiometabolic benefits beyond weight reduction.”

Merck CEO Rob Davis said early last 12 months that the corporate was in search of GLP-1 treatments with advantages beyond weight reduction.

“I feel everyone recognizes that weight management is difficult to reimburse. But in the event you can show cardiovascular outcomes, in the event you can show diabetes outcomes, which you're beginning to see data for, in the event you can see advantages in fatty liver disease…” “That's an area where we expect there's opportunity,” he said at the time at a conference.

This is the latest transaction involving experimental GLP-1 drugs from China. AstraZeneca Last year, Chinese company Eccogene licensed its experimental oral drug, which is now in mid-stage development.