Eli Lilly Wilts on Light Profit, Outlook
Eli Lilly
(LLY) - Get Report
fell shy of first-quarter expectations on Monday, giving up nearly 5% in morning trading.
The Indianapolis, Ind.-based pharmaceutical company benefitted from foreign exchange rates, a tax-audit resolution and strong sales in some of its drug arsenal, but also suffered charges in the first three months of 2008.
Lilly reported profit of $1.06 billion, or 97 cents a share, vs. $508 million, and 47 cents a share in the year-ago quarter. Sales rose to $4.8 billion, from $4.22 billion in 2007.
The recent quarter included a 19-cents-a-share benefit from resolution of a federal tax audit, and a 14-cents-a-share charge for restructuring and acquisitions. The company recognized $145.7 million in asset impairment, restructuring and other special charges, primarily related to the termination of AIR Insulin.
Year-ago results include a 29-cents-a-share charge for the acquisition of Cialis maker Icos.
On an adjusted basis, Lilly earned 92 cents a share, vs. 83 cents a share in the 2007 quarter. Analysts surveyed by Thomson Financial were looking for 96 cents a share on revenue of $4.82 billion.
Despite the miss, some of Lilly's drugs saw strong sales growth. "Double-digit sales growth was once again primarily driven by volume. The sales growth of Cymbalta, Cialis, Alimta, Forteo and Humalog was especially encouraging," said Lilly's new CEO John Lechleiter in a release.
Worldwide sales volume increased 8%, and exchange rates and selling prices contributed 5% and 1% of sales growth, respectively.
Sales of depression and anxiety drug Cymbalta increased 37% to $605 million, driven by an increase in demand. Sales of erectile dysfunction drug Cialis increased 74% to $336 million, due to increased prices and higher demand. And sales of Humalog for diabetes increased 20% to $407 million.
Also sales of cancer drug Gemzar climbed 13% to $462 million, and sales of non-small-cell lung cancer drug Alitma increased 32% to $272 million.
Meanwhile, sales of antipsychotic Zyprexa grew just 1% to $1.12 billion. Zyprexa sales in the U.S. decreased 5% due to a decrease in demand. Demand outside the U.S. also decreased slightly, but international sales still increased 6% in light of favorable foreign exchange rates.
In the first quarter, Lilly received a not-approvable letter from the Food and Drug Administration for Zyprexa long-acting injection for schizophrenia in adults. The agency said it needs more information on the risk and cause of excessive sedation events observed in roughly 1% of patients in clinical trials.
Total revenue of Byetta, which Lilly co-markets with
Amylin
(AMLN)
, totaled $169 million, 15% higher than the first quarter. Amylin said Monday morning that these sales were lower than expected. Lilly records 50% of Byetta's revenue.
Looking ahead, the company expects a profit of between $3.90 and $4.05 a share in 2008. Analysts surveyed by Thomson Financial are looking for an average of $3.95 a share on revenue of $20.3 billion.
Lilly's shares were down $2.19, or 4.2%, at $49.88 in recent trading.
Merck
(MRK) - Get Report
exceeded analysts' earnings estimates for the first quarter and
affirmed its forecast
for 2008, sending its shares higher Monday morning.
Also, shares of
Novartis
(NVS) - Get Report
gained nearly 3% after the Swiss drugmaker reported an increase in its quarterly profits.
Shares of
Pfizer
(PFE) - Get Report
and
Bristol-Myers Squibb
(BMY) - Get Report
also were falling, while
Schering-Plough
(SGP)
stock was edging higher.