Wednesday, October 23 15:27:01
Eli Lilly today reported higher-than-expected quarterly earnings, helped by cost cuts and a big price increase for top-selling antidepressant Cymbalta, which begins facing generic competition in December.
The Indianapolis drugmaker that employs over 700 people in Ireland said it had earned $1.20 billion, or $1.11 per share, in the third quarter, compared with $1.33 billion, or $1.18 per share, a year earlier, when it took special charges for a partnership agreement.
The profit handily topped the analysts' average forecast of $1.04 per share, according to Thomson Reuters I/B/E/S.
Analysts expect the company's earnings to plunge perhaps 25 percent in 2014, as generic versions of Cymbalta and osteoporosis drug Evista flood the market and batter sales of the two blockbuster brands.
Even so, Atlantic Equities analyst Richard Purkiss said investors would probably be rewarded after 2015, when harm from the patent expirations subsides and profits rebound from growing sales of other drugs and the introduction of new Lilly treatments for cancer and other diseases.
"Lilly is likely to be the fastest-growing big-cap pharmaceutical company from 2015 to 2017, once the generic hit from Cymbalta and Evista is over, with double-digit earnings growth," Purkiss said. In the meantime, he said investors can count on a continuation of Lilly's generous dividend.
Shares of Lilly were down 0.1 percent at $50.09 in morning trading.
One of the company's most closely watched experimental drugs is ramucirumab, which when used by itself prolonged survival of patients with stomach cancer in late-stage trials. Some analysts believe its annual sales could exceed $1.5 billion by 2020 if it is approved for the hard-to-treat condition, and other forms of cancer.
Lilly said on Wednesday that U.S. regulators had assigned a priority review to ramucirumab and might decide by the second quarter of 2014 whether to approve it.
The company's sales rose 6 percent to $5.78 billion in the third quarter, slightly above Wall Street expectations of $5.76 billion, with most of the growth coming from price increases on its medicines. Global revenue would have risen 8 percent, if not for the weaker dollar, which lowers the value of sales in overseas markets. (Reuters)