Are Weight-Loss Medications Following a Seasonal Trend Like Gym Memberships?

 Key Takeaways

• GLP-1 drugs show seasonal demand, peaking in early months and slowing later in the year.
• Eli Lilly’s earnings misses may be partly due to this pattern, not declining demand.
• Investor expectations must factor in seasonality when evaluating sales trends.

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Seasonal Trends in GLP-1 Demand

• Unlike chronic disease treatments, GLP-1 drugs behave more like gym memberships, with higher demand in the first half of the year.
• People set weight-loss resolutions in January, leading to spikes in prescriptions for Ozempic, Wegovy, Mounjaro, and Zepbound.
• New patient sign-ups slow in the second half, similar to fitness trends where gym memberships surge early and drop later.
• Evercore ISI analyst Umer Raffat found this trend dating back to 2016, indicating a consistent pattern.

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Implications for Eli Lilly’s Growth

• Eli Lilly missed earnings projections twice in a row due to lower-than-expected GLP-1 sales.
• The stock dropped after these earnings reports, confusing investors who expected steady growth.
• If seasonality explains part of the decline, it means demand remains strong, just cyclical.
• Projections suggest Mounjaro and Zepbound could reach $25 billion in sales in 2025, pushing total revenue beyond $62 billion.
• This would put Eli Lilly’s revenue at the upper end of its $58B-$61B forecast.

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Beyond Seasonality: Barriers to GLP-1 Access

• Unlike gym memberships, obtaining GLP-1 drugs is complicated:
  • Insurance restrictions and high costs limit access.
  • Employer reluctance to cover expensive weight-loss drugs is a major barrier.
  • List prices exceed $1,000 per month, making out-of-pocket costs unaffordable for many.
• Only half of large employers cover GLP-1 medications, and smaller businesses rarely do.

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What’s Next?

• Eli Lilly might see a strong rebound in Q1 and Q2 of 2025, but should temper expectations.
• If the company raises revenue forecasts too aggressively, it risks another earnings miss later in the year.
• Investors should factor in seasonality when evaluating sales trends, as GLP-1 usage may follow annual weight-loss cycles.

🔹 Bottom Line: The GLP-1 market isn’t slowing—it’s seasonal. Drugmakers and investors must adjust expectations accordingly.