'Exactly the Trajectory We Want to be On,' Eli Lilly (LLY) CEO Lechleiter Tells CNBC

CEO of the drug manufacturing company Eli Lilly (LLY), John Lechleiter, joined CNBC's "Squawk Box" this morning to discuss the company's second quarter earnings.
By Giovanni Bruno ,

NEW YORK (TheStreet) --Eli Lilly (LLY) - Get Report reported second quarter earnings that beat analyst expectations Monday morning. The company posted earnings per share of 86 cents, beating analyst estimates of 85 cents and revenue totaled $5.4 billion, topping projections of $5.15 billion.

The CEO of the drug manufacturing company, John Lechleiter, joined CNBC's "Squawk Box" this morning to discuss the company's results, drug pricing, and forecast what's on the horizon.

"We grew 9% revenue. Eight percent of that was volume growth, and of that 8%, 6% points came from new products launched since 2014," Lechleiter said, about the "pleasing" revenue marks accomplished  this quarter.

"This is exactly the trajectory we want to be on," he said, crediting the expansion into the Japanese market, which historically has been a tough to infiltrate. Japan is a first for the company giving it exposure in an important market.

Pricing, as well the government regulations, are often major questions faced by drug manufacturers. Lechleiter tackled both issues this morning.

"Government policy matters a lot," he said, envisioning a future where there's going to be a more challenging drug pricing atmosphere. However, the company will "stand against major shifts in government reimbursement policy."

"Last year, drug prices grew 2.8% on a net price basis, we need to keep this in perspective," Lechleiter said, citing that medications keep people well, out of the hospital, and avoid costly treatments.

Finally, Lechleiter forecasted what the comapny is striving to accomplish in the coming months.

"We've got a drug that's currently being studied for the treatment of breast cancer, we could file that this quarter depending on an analysis of further breast cancer studies," he noted.

Shares of Eli Lilly are higher by 0.88% to $82.70 in pre-market trading Tuesday morning.

Separately, TheStreet Ratings rates Eli Lilly as a "Buy" with a ratings score of "B." This is driven by multiple strengths, which TheStreet Rating believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks TheStreet Rating covers.

The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. TheStreet Rating feels its strengths outweigh the fact that the company shows weak operating cash flow.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

You can view the full analysis from the report here: LLY

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