Eli Lilly (Cialis manufacturer) seen posting positive 1Q results
NEW YORK (Associated Press) – Eli Lilly & Co. (Cialis manufacturer) reports earnings for the first quarter on Monday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Legal expenses could continue nagging the company as it deals with lawsuits from several states over the blockbuster schizophrenia and bipolar disorder drug Zyprexa. The company has been dealing with allegations that it played down the drug’s side effects and marketed it for unapproved uses.
In March, Eli Lilly said it would settle with Alaska for $15 million in that state’s lawsuit alleging the company failed to sufficiently warn doctors and patients that using the drug could lead to severe obesity, elevated blood sugar and diabetes.
The drug brought in $4.8 billion in sales in 2007, but the company has spent more than $1 billion to settle product liability claims.
Meanwhile, the Food and Drug Administration denied approval of a longer-lasting version of Zyprexa, saying it needed to learn more about the drug’s excessive sedation effects. The move came as a surprise to the company, as a federal advisory panel previously unanimously recommended approval.
A charge is likely during the quarter following the company’s move to pull out of a late-stage development program for its AIR inhaled insulin. The drug was in late-stage development when Eli Lilly made the decision, citing a lack of confidence in the market and possible regulatory hurdles. Pfizer Inc. pulled a similar product, Exubera, from the market late last year, citing lackluster sales.
Sales of Lilly’s erectile dysfunction drug Cialis may have gotten a boost during the quarter after the FDA approved a new daily dose of the drug.
BY THE NUMBERS: Analysts polled by Thomson Financial, on average, forecast first-quarter earnings of 96 cents per share on $4.82 billion in revenue.
ANALYST TAKE: Wall Street projects mostly positive results from Eli Lilly, with sales gains for the depression treatment Cymbalta, diabetes treatment Byetta, and Cialis.
BMO Capital Markets analyst Robert Hazlett said the company could beat forecasts with Zyprexa sales rising 3 percent to $1.14 billion and Cymbalta sales rising 36 percent to $600 million. Zyprexa will likely see benefits from price increases and international sales, he said.
Leerink Swann & Co. analyst Seamus Fernandez expects profit and sales to meet or beat forecasts, with a weak U.S. dollar and price increase pushing revenue. Both those factors could push earnings per share to 98 cents, he said.
Looking ahead, Lehman Brothers analyst Charles Butler said investors will likely keep their focus on the company’s anti-clotting drug candidate prasugrel in the wake of the pipeline loss of AIR insulin and the FDA denial of longer-lasting Zyprexa.
STOCK PERFORMANCE: Eli Lilly’s stock fell about 3.5 percent during the quarter to finish at $51.59. The stock hit a 52-week low of $46.60 March 17.
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