Drug maker Eli Lilly and Co. (LLY) Wednesday reported higher profit for the first quarter, benefiting from the transfer of some commercial rights. Adjusted profit topped estimates, while revenues remained flat and missed view. The company backed its full year outlook.
Lilly, which is trying to make up the loss of patent exclusivity for schizophrenia drug Zyprexa saw antidepressant Cymbalta's revenue increase 19 percent in the quarter.
John Lechleiter, Lilly's CEO, said, ''Lilly delivered solid financial results in the first quarter of 2013 despite numerous headwinds, as growth in several key products and regions offset the post-patent decline in Zyprexa, a weaker Japanese yen and a slowdown in parts of our animal health business. We also continued to maintain strict expense controls this quarter.''
Net income increased to $1.55 billion or $1.42 per share from last year's $1.01 billion or $0.91 per share, as a result of higher other income from the transfer of exenatide commercial rights outside of the U.S. to Amylin.
Excluding mainly this income from the transfer of rights, net income totaled $1.14 per share, while it was $0.92 per share last year. On average, 17 analysts polled by Thomson Reuters expected earnings per share of $1.05 for the quarter. Analysts' estimates typically exclude one-time items.
Worldwide total revenue was $5.60 billion, flat with last year. Analysts estimated revenues of $5.66 billion for the quarter.
Lilly said an increase of 4 percent in revenue from higher prices was offset by decreases of 3 percent due to lower volume and 1 percent due to unfavorable foreign exchange impact.
The decrease in volume was primarily due to the loss of patent exclusivity for Zyprexa in most major markets, partially offset by volume gains for some other products.
Total revenue in the U.S. advanced 2 percent to $3.137 billion amid increased prices. Revenue outside the U.S. decreased 2 percent to $2.465 billion, driven mainly by Zyprexa's patent exclusivity loss and unfavorable currency impact.
Product-wise, Cymbalta's revenue increased 19 percent to $1.33 billion while Zyprexa revenue declined 49 percent to $284.8 million.
Blood thinner Effient's sales were flat at $115.9 million. Osteoporosis drug Forteo's sales rose 4 percent to $281.5 million. Animal Health product sales rose 2 percent to $499.1 million.
Marketing, selling and administrative expenses decreased 11 percent to $1.652 billion, as the company tried to contain costs.
The firm recorded Other income of $529.2 million, compared with expense of $46 million last year, primarily related to income of $495.4 million stemming from the transfer of exenatide commercial rights outside of the U.S. to Amylin.
For 2013, the company reiterated its earnings per share view of $4.10 to $4.25 on a reported basis, or $3.82 to $3.97 on a non-GAAP basis. Lilly still anticipates annual revenue between $22.6 billion and $23.4 billion. Analysts project full-year earnings per share of $3.90 on revenues of $22.98 billion.
LLY closed at $58.33 on Tuesday. The stock is up 1.5 percent in pre-market activity.
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