Drug maker Eli Lilly and Co. (LLY) on Tuesday reported a 27 percent decline in fourth-quarter profit, as the company lost patent exclusivity for its top-selling schizophrenia drug Zyprexa and chemotherapy medicine Gemzar. Adjusted earnings and revenues topped Wall Street view. The company also backed its 2011 earnings forecast, which is up to 21 percent lower than that of 2011.
Net income for the quarter declined to $858.2 million or $0.77 per share from $1.17 billion or $1.05 per share in the prior year and $1.24 billion or $1.11 per share in the preceding third quarter.
The latest results included a special charge of $0.05 per share related to Xigris withdrawal and restructuring charges of $0.05 per share. Prior year results included restructuring charges of $0.06 per share.
On an adjusted basis, earnings declined to $0.87 per share from last year's $1.11 per share. On average, 18 analysts polled by Thomson Reuters expected earnings per share of $0.81 for the quarter. Analysts' estimates typically exclude one-time items. Total revenue slipped 2 percent to $6.05 billion from $6.19 billion in the prior year and $6.15 billion in the previous quarter, due mainly to patent expirations for Zyprexa and Gemzar. Analysts estimated revenues of $5.90 billion for the quarter.
The revenue drop of 2 percent comprised a decrease of 11 percent due to price, partially offset by an increase of 8 percent in volume and a rise of 1 percent due to the impact of foreign exchange rates.
Total revenue in the U.S. decreased 4 percent to $3.281 billion due to loss of patent exclusivities. Outside the U.S., total revenue remained flat at $2.765 billion due to increased volume and the positive impact of foreign exchange rates, although offset by lower prices.
Zyprexa's revenues dropped 44 percent in the quarter to $749.6 million as it went off patent exclusivity during the quarter. Chemotherapy drug Gemzar's sales decreased 62 percent to $92.6 million.
Sales of Cymbalta, used to treat major depressive disorder, increased 20 percent to $1.181 billion with 19 percent growth in the U.S., driven by increased prices and higher demand.
For the year as a whole, net income declined to $4.35 billion or $3.90 per share from $5.07 billion or $4.58 per share in the prior year. Adjusted earnings were $4.41 per share. Revenue improved 5 percent to $24.29 billion. Wall Street was looking for earnings of $4.35 per share on revenues of $24.14 billion.
Looking ahead, the company reaffirmed its earnings per share guidance of $3.10 to $3.20 for 2012, which is down 18 to 21 percent from 2011 reported earnings. Analysts currently expect earnings of $3.19 for the year.
LLY closed on Monday at $39.25, compared to the previous close of $39.20, on 26.02 million shares. In pre-market trade, the shares rose a percent.
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