Lilly misses estimates on weak demand, COVID drug development costs

Eli Lilly and Co fell short of analysts' expectations for third-quarter profit on Tuesday due to increased costs to develop COVID-19 treatments and lower demand for some its medicines.

Lilly is one of the handful of companies racing to develop a treatment for COVID-19 and has sought emergency use authorization for its antibody treatment for mild to moderate patients as well as its arthritis drug baricitinib.

The company did not provide any fresh update on the treatment in its results statement, a day after it said no additional hospitalized COVID-19 patients would receive its the treatment as data suggested that the therapy was unlikely to help these patients recover.

The drugmaker said other trials of its coronavirus antibody therapy remain on track.

Lilly said it expects 2020 COVID-19 research and development expense to be roughly $400 million, sending its shares down 4% before the opening bell. Overall operating expenses increased 9% to $3.04 billion in the third quarter.

Net income fell 4% to $1.21 billion, or $1.33 per share, in the quarter ended Sept. 30.

Excluding items, the drugmaker earned $1.54 per share, below analysts' average estimate of $1.71 per share, according to IBES estimates from Refinitiv.

The drugmaker's sales has been hit in the first six months of the year as patients avoided hospitals and doctors' offices because of the COVID-19 pandemic.

In the third quarter, revenue rose 5% to $5.74 billion, but came in below the average estimate of $5.88 billion.