Slumping Prozac sales once again depressed profits at

Eli Lilly

(LLY) - Get Report

.

Reporting before the market opened Monday, the drugmaker posted first-quarter net income of $629.8 million, or 58 cents per share, compared with net income of $806.8 million, or 74 cents per share, in the year-ago quarter. Earnings matched previously reduced Wall Street analyst estimates.

Lilly's sales in the first quarter totaled $2.56 billion, down from sales of $2.8 billion in the first quarter of last year.

Lower Prozac sales continue to drag down the drugmaker. Sales of the antidepressant fell 70% to $186.1 million in the quarter because of competition from cheaper, generic versions of the drug that hit the market in August.

Like the rest of Big Pharma, Lilly needs to develop or license new drugs to make up for the revenue shortfall caused by rising generic competition. But so far, Lilly's highly anticipated sepsis drug, Xigris, is not making the cut since its launch last fall. Xigris sales totaled just $22 million in the first quarter. Lilly warned back in early March that Xigris' early sales growth was proceeding slower than expected.

Lilly's next big thing is its impotence drug, Cialis, which the company says should be approved this year. The Food and Drug Administration told Lilly late last year that it could hold up approval of some new drugs because of quality control issues at some of its manufacturing plants. Monday, Lilly said FDA inspections are under way but it still expects to launch Cialis in the second half of the year.

The drugmaker also has new medicines to treat depression and attention deficit hyperactivity disorder pending FDA approval review.

Looking ahead, Lilly forecast second-quarter earnings of between 61 cents per share and 63 cents per share, in line with current Wall Street estimates. The drugmaker also reiterated full-year 2002 earnings of a range between $2.70 per share and $2.80 per share, with sales growth in the low- to mid-single digits. Analysts are expecting 2002 earnings to fall 2% to $2.71 per share, according to Thomson Financial/First Call.

Shares of Lilly closed Friday at $73.42 per share.