Lilly's Q3 profits drop sharply, hammered by patent expirations
- Eli Lilly's Q3 revenues fell 15.5% to $4.88 billion while gross profits and operating profits dropped 21% and 61.3%, respectively, compared to Q3 2013. Net income was down 58.4%. The figures forced the company to revise its 2014 outlook downwards by $200 million to the $19.4 billion-$19.8 billion range.
- Lilly had originally been projecting earnings per share of $2.67 to $2.75; that's been lowered to $2.34 to $2.42.
- The disappointing earnings report was driven by several major patent expirations, including for the antidepressant Cymbalta and osteoporosis drug Evista. Sales for those medications fell 73.3% and 64.9%, respectively.
Lilly's 2014 slump continues as it grapples with the expiration of several major-selling drugs' patents. Even strong sales in other departments such as animal health weren't enough to buoy the earnings report.
Lilly CEO John Lechleiter still expressed optimism. "While Lilly's third-quarter financial results continue to reflect the impact of recent patent expirations, our clinical pipeline is now producing strong momentum to drive future growth," he said.
Lechleiter's referring in large part to a promising diabetes pipeline that includes the recently-approved Trulicity, a once-weekly type 2 diabetes injectable that's proven to be as effective as Novo Nordisk's $2 billion per year blockbuster Victoza. Analysts estimate that Trulicity's convenient dosing schedule could drive it to as much as $1.3 billion in sales in 2020.
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