The selloff was triggered after an update by Lilly that announced preliminary fourth-quarter revenue that fell short of Wall Street analysts (via Bloomberg Consensus), driven mainly by weaker-than-expected sales of its blockbuster weight-loss and diabetes drugs.

In a news release, the Indianapolis-based pharmaceutical company stated that it expects fourth-quarter revenue of about $13.5 billion, $400 million below the low end of its previous estimate issued in October. Analysts surveyed by Bloomberg had forecasted $14 billion, while FactSet analysts expected $13.93 billion.

Both Mounjaro for diabetes and Zepbound for obesity came in below estimates. Lilly revealed that the market for the drugs expanded slower than previously forecasted in the fourth quarter and inventory was lower than expected. The company did note that other drugs performed inline with its expectations.

In an interview at the JPMorgan Healthcare Conference in December, Lilly CEO Dave Ricks said drug purchases usually ramp up at the end of the year. 

"But we did not see that," Ricks said, adding, "Our guidance relied on a bit of a bump up, which we had seen the last four or five years in December. It just didn't occur."

For 2025, Lilly expects revenue between $58 billion and $61 billion, compared with analysts' average estimate of around $58.7 billion. 

Meanwhile, Goldman's GLP-1 Winner Basket is underperforming its Loser Basket, reflecting the sagging obesity drug bubble. This shift comes ahead of Trump 2.0, with Robert F. Kennedy Jr. likely to head the Department of Health and Human Services.