Eli Lilly Q3 Sales Hurt by Generic Competition

Eli Lilly has announced an 11% fall in their third-quarter sales to $5.4 billion, as generic competition to Zyprexa continued to hurt sales.

Net income (GAAP) for the period increased by 7% to $1.3 billion, as the drop in sales was counteracted by a $1.4 billion payment from Bristol-Myers Squibb, as a result of the latter’s acquisition of Amylin.

Earnings per share grew by 6% at $1.18 from the year-ago quarter.

However, operating income came to $1.1 billion, a drop of 32% from the third quarter of 2011, primarily as a result of lower gross margin from the loss of patent exclusivity for their schizophrenia drug, Zyprexa, partly compensated by a decrease in total operating expenses (down 3%).

From the 11% drop in sales, 9% was as a result of lower volume, with the remainder due to currency effects.

Eli Lilly are certainly feeling the effects of losing patent protection for their schizophrenia drug, with the medication’s third-quarter sales dropping 68% to $374.5 million.

Total revenues in America fell by 9% to $3 billion, while elsewhere sales fell 15% to $2.5 billion, as Zyprexa and pricing-related losses were somewhat offset by greater volume in other products.

The antidepressant/fibromyalgia blockbuster Cymbalta (duloxetine) was a main player during the period, with sales increasing 16% to $1.2 billion.

Product Sales

Also on the rise were sales of lung cancer drug Alimta (pemetrexed), up 2% at $643.6 million; erectile dysfunction drug Cialis (tadalafil) which grew 3% to $482.1 million; osteoporosis therapy Forteo (teriparatide) which increased 20% to $288.7 million; and the bloodthinner Effient (prasugrel) which jumped 31% to $109.7 million.

Those performing less well included the osteoporosis drug Evista (raloxifene), sales of which dropped 9% to $247.0 million; Strattera (atomoxetine) for attention-deficit hyperactivity disorder, which decreased 5% at $145.6 million; and the insulin product Humulin, dropping 7% to $131.9 million.

“The third quarter was an eventful one for Lilly, as we gained a better understanding of several potential new medicines in our clinical pipeline, while maintaining focus on delivering solid financial results despite the loss of Zyprexa patent exclusivity,” commented John Lechleiter, Eli Lilly’s chief executive.

Looking to the future, Eli Lilly have updated their 2012 EPS guidance, confirming that they now expect their full-year result to fall in the $3.68 to $3.78 range.

But they still anticipate revenues of between $21.8 and $22.8 billion, including a predicted decline of over $3 billion in Zyprexa sales.


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