Eli Lilly and Co. (LLY) - Get Report delivered better-than-expected second-quarter results on Tuesday, July 25, but the pharmaceutical company's shares were trading lower amid news that a resubmission of the new drug application for rheumatoid arthritis drug baricitinib to the U.S. Food and Drug Administration will be delayed beyond 2017.

The FDA rejected the drug in April.

On Tuesday, Eli Lilly and Incyte Corp. (INCY) - Get Report said they will be further discussing the path forward with the FDA and considering options for resubmission, including the possibility of an additional study, as the agency had requested. The companies said they anticipate it would take at least 18 months before they resubmit their application.

"While these updates are disappointing, it is consistent with our modeled US introduction in 2021," wrote Leerink Partners LLC analyst Seamus Fernandez in a Tuesday note.

Shares of Eli Lilly were trading at $81.63 on Tuesday, down 3.7%. Incyte shares were changing hands at $134.07, down 3%.

Indianapolis-based Eli Lilly reported non-GAAP earnings per share of $1.11, up 29% from the same period a year ago. Revenue grew 8% year-over-year to $5.82 billion fueled by volume growth from new pharmaceutical products including diabetes medicine Trulicity and psoriasis drug Taltz.

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Analysts have forecast, on average, non-GAAP EPS of $1.05 on revenue of $5.59 billion, according to FactSet Research Systems Inc.

"The sales beat was across the board with most major products coming in above our estimates partially offset by a 7% miss on our animal health estimates coming into the quarter ($784m vs. our $840m estimate)," Fernandez wrote.

He noted that new pharmaceutical products Taltz, Trulicity, Basaglar and Jardiance "continue to perform above our expectations with combined sales of ~$809m coming in ~9% above our estimates."

Trulicity sales totaled $480.2 million in the second quarter, up 139% year-over-year. Taltz had sales of $138.7 million, up 618%. Basal insulin Basaglar generated $86.6 million, up 432% and diabetes medicine Jardiance had $103.2 million, up 157%

Also on Tuesday, Eli Lilly gave an update on its oncology research and development strategy.

Besides building on new products including Cyramza (ramucirumab),Lartruvo (olaratumab) and abemaciclib, the company said it will pursue "new standard-of-care changing therapies that target tumor dependencies in molecularly enriched populations, build rational combinations that overcome resistance, and develop next-generation immunotherapies."

Eli Lilly said it plans to concentrate on seven pipeline assets for priority internal development and three additional assets that are pending data from ongoing studies. "The company has or will seek external partners on the other molecules in clinical development as appropriate," Eli Lilly added.

The company also updated its EPS outlook, lowering its 2017 reported EPS guidance to the $2.51 to $2.61 range, compared with previous guidance of  $2.60 to $2.70, and increasing non-GAAP EPS guidance to the $4.10 to $4.20 range, compared with the prior range of $4.05 to $4.15.

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