Eli Lilly & Co. (LLY)
Q2 2012 Earnings Call
July 25, 2012 9:00 am ET
Derica W. Rice - Chief Financial Officer, Executive Vice President of Global Services and Member of Policy & Strategy Committee
Enrique A. Conterno - Senior Vice President and President of Lilly Diabetes
David A. Ricks - Senior Vice President and President of Lilly Bio-Medicines
Jan M. Lundberg - Executive Vice President of Science & Technology and President of Lilly Research Laboratories
Charles Anthony Butler - Barclays Capital, Research Division
Mark J. Schoenebaum - ISI Group Inc., Research Division
Tim Anderson - Sanford C. Bernstein & Co., LLC., Research Division
Seamus Fernandez - Leerink Swann LLC, Research Division
Catherine J. Arnold - Crédit Suisse AG, Research Division
Steve Scala - Cowen and Company, LLC, Research Division
Marc Goodman - UBS Investment Bank, Research Division
Christopher Schott - JP Morgan Chase & Co, Research Division
Gregory B. Gilbert - BofA Merrill Lynch, Research Division
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Ladies and gentlemen, thank you for standing by, and welcome to the Q2 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded.
I would now like to turn the conference over to our host, Vice President, Investor Relations, Phil Johnson. Please go ahead.
Good morning. Thank you for joining us for Eli Lilly & Co.'s Second Quarter 2012 Earnings Conference Call. I'm Phil Johnson, Vice President of Investor Relations. Joining me are John Lechleiter, our Chairman, President and CEO; Derica Rice, our Chief Financial Officer; Dr. Jan Lundberg, our President of Lilly Research Laboratories; Dave Ricks, President of our Lilly Bio-Medicines business; Enrique Conterno, President of our Diabetes business; and Ilissa Rassner and Travis Coy from the Investor Relations team.
During this conference call, we anticipate making projections and forward-looking statements that are based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on Slide 3 and those outlined in our latest forms 10-K and 10-Q filed with the Securities and Exchange Commission. The information we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions.
We're very pleased with our performance in the second quarter 2012. In the face of significant reductions in revenue and earnings due to the Zyprexa patent expiration, Lilly employees around the world continue to focus on execution. They delivered result that position us to raise our 2012 financial guidance, and it places on track to meet or exceed our financial minimum goals through 2014.
Let's begin today's call with a review of events that have taken place since our last earnings call. First, 2 important decisions from Washington. In a much-anticipated ruling, the Supreme Court upheld most aspects of the Affordable Care Act, and the FDA Safety and Improvement Act was signed into law, which included the reauthorization of the Prescription Drug User Fee Act or PDUFA.
From a commercial perspective, Cymbalta received pediatric exclusivity from the U.S. FDA. As a result U.S. exclusivity for Cymbalta will expire in December 2013, and Amyvid became available to imaging centers in many U.S. cities across the country.
On the regulatory front, the U.S. FDA approved ERBITUX in combination with FOLFIRI as first-line treatment for patients with KRAS mutation-negative EGFR-expressing metastatic colorectal cancer, and Europe's CHMP issued a positive opinion recommending approval of Jentadueto for use along with diet and exercise to improve glycemic control in adults with type 2 diabetes who are inadequately controlled by metformin or sulfonylurea or a combination of both, as well as those who were already taking linagliptin and metformin. I'm pleased to report that we just recently received European Commission approval for this indication.
In clinical news, we presented Phase II data on 3 compounds. At the American Diabetes Association scientific sessions, we presented data on our novel basal insulin analog from Phase II studies in patients with both type 1 and type 2 diabetes. At the meeting the American Society of Hypertension, we presented the data from a large Phase II ambulatory blood pressure monitoring safety study of dulaglutide. And along with Incyte at the European League Against Rheumatism Annual European Congress of Rheumatology, we presented 12-week data from the Phase IIb trial of baricitinib in patients with active rheumatoid arthritis.
We believe that this Phase II data support the decisions we've made to move our novel basal insulin analog and dulaglutide into Phase III testing. And in the case of baricitinib, it's supported by the 24-week data of moving that molecule into Phase III testing in rheumatoid arthritis later this year or early next year.
In other clinical news, we also announced the first of 2 pivotal trials for pomaglumetad methionil as monotherapy therapy for schizophrenia did not meet its primary efficacy endpoints. Interim data from the second pivotal monotherapy trial and final data from our Phase II adjunctive trial are expected later this year and will inform future development plans for the molecule.
At the meeting of the American Society of Clinical Oncology, we presented overall survival data from the Phase III PARAMOUNT trial with Alimta induction therapy followed by Alimta's maintenance therapy. Patients on the Alimta continuation maintenance arm achieved a median overall survival of 13.9 months from randomization compared to 11.0 months from randomization for patients on the placebo arm. We expect FDA action later this year on our sNDA for this indication.
There are few other important events over the past few months. Our Board of Directors authorized the resumption of the share repurchase program begun in 2000. We expect to purchase the remaining 420 million in shares by the end of this year. Following the completion of the current program, we anticipate resuming share repurchases with size and timing subject to board approval.