Eli Lilly (LLY) experienced a “bump in the road” for its newest diabetes treatment, Mounjaro, an analyst said Thursday as LLY stock toppled.

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Mounjaro sales came out to $279.2 million, missing expectations for $288 million to $370 million, according to various analyst calls. Lilly’s slides indicate Mounjaro is now covered for about 50% of commercial insurance and Medicare Part D recipients, ticking up from just 45% in the third quarter, SVB Securities analyst David Risinger said in a note to clients.

Further, sales of Lilly’s biggest diabetes medicine, Trulicity, also came in below forecasts at $1.94 billion, though rose 3%. Analysts expected $2.07 billion to almost $2.1 billion, Risinger said.

But Edward Jones analyst John Boylan says the LLY stock dive is an overreaction. He notes Lilly is also testing Mounjaro as a treatment for obesity, sleep apnea and other diabetes-related diseases. Before the open on today’s stock market, Lilly shares sank 5.7% near 323.20.

“Demand remains strong for Trulicity and Lilly had issues keeping up with orders,” he said in a note. “We suspect the same is true for Mounjaro. As manufacturing capacity increases for these key products, this issue likely will dissipate.”

He added: “This quarter’s results can be seen as a bump in the road.”

LLY Stock: Covid Antibodies Weigh On Sales

Overall fourth-quarter sales decreased 9% to $7.3 billion as revenue from Lilly’s Covid antibodies took a massive hit. Excluding their impact, sales actually climbed 5%, Lilly said in a news release. Sales were a hair below expectations for $7.33 billion, according to FactSet.

Adjusted earnings dipped 4% to $2.09 per share, but easily topped forecasts between $1.78 and $1.87. SVB’s Risinger noted Lilly experienced a much lower-than-expected tax rate, which helped prop adjusted earnings by 15 cents a share.

Breast cancer drug Verzenio put up the best growth, doubling year over year to $808 million. That handily topped projections for $706 million to $725 million, he said. On the flip side, revenue from Lilly’s Covid antibodies plummeted 96% to $38 million. Though LLY stock analysts expected a dive, that was far steeper than calls for $102 million to $200 million in sales.

Lilly raised its earnings outlook for the year to $8.35-$8.55 per share, minus some items. Analysts expected $8.35 a share. The company kept its sales guidance for $30.3 billion to $30.8 billion, in line with LLY stock analysts’ forecast for $30.47 billion.

LLY stock recently slid below the low side of a flat base with a buy point at 375.35, according to MarketSmith.com.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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