💉 Lilly’s weight woes

When optimism backfires… Eli Lilly stock fell 7% yesterday after the pharma juggernaut trimmed its annual sales forecast, saying demand for its weight-loss and diabetes drugs wouldn’t match the lofty levels it had expected. Its diabetes treatment, Mounjaro, and obesity drug, Zepbound, have spiked in popularity as more folks inject them to shed pounds. Still, the company said it made a combined $5.4B from the drugs in the fourth quarter, less than the $6.5B that analysts were looking for. 

• Problem: Lilly was struggling to keep up with demand for the blockbuster drugs, whose active ingredient (tirzepatide) was in shortage until late last year.

• Solution: Lilly spent billions ramping up production of the injectables, and CEO Dave Ricks said there’s “tons of supply coming online.”

Don’t just blame supply… As companies pile into the weight-loss-drug biz, Lilly has had to fend off rising competition — and not just from industry leaders like Novo Nordisk, which makes Ozempic and Wegovy. The two-year shortage of GLP-1 injections gave telehealth companies like Hims & Hers and Ro a chance to weigh in with cheaper compounded versions of name-brand obesity drugs. But now that the FDA’s declared the shortage over, compounding pharmacies will be likely hampered from selling copycats, which could boost pharma titans.

In need of a mixer… Tennessee whiskey might not be as smooth as Chris Stapleton's hit suggests. Jack Daniel’s parent Brown-Forman said it would lay off 12% of its staff, or about 650 employees. The spirits seller is also closing its Louisville barrel-making facility. Brown-Forman says the cost cuts would save the company up to $80M/year: a relief as booze brands continue to feel the spins from Americans’ changing drinking habits.

• Whiskey soured: Brown-Forman’s sales have fallen for four straight quarters. Last year marked its stocks’ worst performance in a half century, and shares are at a decade low.

• On the rocks: Consumers have balked at higher prices up and down the alcohol aisle. Whiskey sales volumes in the US dropped 2% through August, a real slide from the 5% annual growth in volumes between 2019 and 2022.

Dry as a bone… Alcohol companies have been squeezed by weed use, obesity drugs, and a boom in zero-proof alts from companies like Athletic Brewing and Ghia. Sales of nonalcoholic spirits surged 29% between 2022 and 2023, while in the first half of last year alcohol sales in the US fell almost 3%. Booze biggies like Pernod Ricard, Molson Coors, and AB InBev have recently reported falling sales or volumes. This month, Modelo maker Constellation Brands said its wine and spirits sales tumbled 14%.