Updated from 8:15 a.m. ESTEli Lilly ( LLY) Wednesday posted solidly higher fourth-quarter net income, excluding a big one-time tax charge and restructuring costs, as it edged past analysts' EPS estimates thanks to its latest generation of drugs. Excluding items, net income rose 13% to $814.3 million, or 75 cents a share, vs. $723.3 million, or 67 cents a share, a year ago. Analysts were expecting 74 cents a share, according to Thomson First Call. The news was good enough to send the stock up $1.95, or 3.6%, to $56.80. Including one-time items, the Indianapolis-based drugmaker had a net loss of $2.4 million, equivalent to zero cents a share, primarily due to a $465.0 million tax expense on the expected repatriation to the U.S. of $8.0 billion of eligible overseas earnings in 2005 under the American Jobs Creation Act of 2004, as well as the charges for the previously announced restructuring initiatives. That compares with a profit of $747.2 million, or 69 cents a share, in the year-ago period. Lilly is the latest drugmaker to take advantage of a one-year tax break for overseas profits. Under a law signed by President George W. Bush in October, the tax rate will be 5.25% instead of the customary corporate tax rate of 35%. Schering-Plough ( SGP) and Johnson & Johnson ( JNJ) also outlined their tax plans in fourth-quarter results. Pfizer ( PFE) said it is looking into the option. Lilly's operating income decreased 48% to $450.9 million, due largely to $494.1 million in asset impairments, restructuring and other special charges. Fourth-quarter revenue increased 5% to $3.64 billion. Last year, "Lilly launched five new products plus six new indications or formulations
Taurel said sales of Alimta, Cymbalta and six other newer products doubled in 2004 and are expected to double again this year to about 20% of corporate sales. The newer products contributed $498.7 million to fourth-quarter sales and accounted for 14% of total sales, twice the rate of a year ago. For the full year, these products contributed $1.55 billion in sales, or 11% of corporate revenue.
Another high-profile product that has run into some difficulty is the impotence drug Cialis, marketed by Lilly and the drug's developer Icos ( ICOS). Although Cialis still trails Viagra, made by Pfizer ( PFE), it has moved into second place in the U.S. market ahead of Levitra, from GlaxoSmithKline ( GSK) and Bayer ( BAY). However, analysts say the erectile dysfunction market isn't growing as fast as the drug companies had expected, and Lilly executives said Wednesday that Cialis has encountered some overstocking among U.S. wholesalers. The wholesaler logjam should clear up during the first quarter of 2005, they said. Worldwide fourth-quarter 2004 sales of $152.7 million were down slightly from third-quarter sales of $154.1 million. Cialis entered in the U.S. market in late-November 2003. Worldwide Cialis sales were $552.3 million last year compared to $203.3 million in 2003.