Eli Lilly’s Earnings Rise on Cialis

Eli Lilly & Co., the world’s biggest maker of psychiatric drugs, said second-quarter earnings rose 44 percent on rising sales of the antidepressant Cymbalta and the impotence pill Cialis.

Net income increased to $958.8 million, or 88 cents a share, from $663.6 million, or 61 cents, a year earlier, when earnings were weighed down by the purchase of three companies, Indianapolis-based Lilly said today in a statement. Sales jumped 11 percent to $5.15 billion, and profit excluding some items matched analysts’ estimates.

Cymbalta and Cialis are vital to Lilly’s plan to replace revenue it expects to lose in 2011, when its top seller, the antipsychotic drug Zyprexa, gets cheaper generic competition. Lilly also expects its experimental blood-thinner prasugrel to win U.S. approval in September.

“Lilly’s always been a Zyprexa story, and it didn’t erode that much,” said Les Funtleyder, an analyst with Miller Tabak & Co. in New York, in a telephone interview today. “Until there are more products, it is Zyprexa, Cymbalta and insulins, and they all did alright.”

Lilly lowered its 2008 forecast to $3.79 to $3.94 a share, from $3.90 to $4.05, on costs of closing factories and eliminating jobs. Excluding those one-time items, the company’s 2008 forecast is unchanged, said Mark Taylor, a Lilly spokesman, in a telephone interview today.

‘Ultimate Fix’

Second-quarter profit, adjusted for the cost of employee buyouts, matched the 99 cents a share estimate of 14 analysts surveyed by Bloomberg.

Lilly rose 38 cents to $48 in New York Stock Exchange composite trading at 4:02 p.m. The shares have declined 10 percent this year.

“The ultimate fix for our patent loses will be the introduction of new products,” Chief Executive Officer John Lechleiter said in a Bloomberg television interview today. He said the company is developing more than 50 new drugs and “What we are really focused on is moving that pipeline forward.”

The U.S. Food and Drug Administration is scheduled to decide whether to approve prasugrel by Sept. 26. The drug would compete with Plavix, sold by Bristol-Myers Squibb Co. and Sanofi-Aventis SA, which had $8.1 billion in sales last year.

Lilly on July 8 agreed to buy SGX Pharmaceuticals for $64 million to extend their collaboration researching new drug molecules. Lilly also licensed a TransPharma Medical Ltd. osteoporosis drug for $35 million, resulting in a charge of 2 cents a share.

Zyprexa Threat

A beneficial foreign exchange rate accounted for 6 percent of Lilly’s 11 percent revenue growth, the company said.

Zyprexa sales could suffer this year when the drug gets fresh competition from lower-priced generic copies of Johnson & Johnson’s antipsychotic drug Risperdal, analysts said. Zyprexa revenue rose 2 percent in the second quarter to $1.24 billion.

Lechleiter said many people with schizophrenia cycle through various drugs, so even with new competition “we’re confident Zyprexa will still get its fair share of use.”

Cymbalta sales rose 26 percent to $654.4 million. Cialis generated $362.2 million in revenue, a 24 percent increase.

Worldwide sales of the diabetes drug Byetta, which Lilly markets with Amylin Pharmaceuticals Inc., increased 25 percent to $194.7 million. Lilly’s portion of the profit from Byetta climbed 27 percent to $101.2 million.

“There isn’t anything terribly exciting taking place at Lilly right now,” said Barbara Ryan, a Deutsche Bank analyst in Greenwich, Connecticut, in a telephone interview before earnings were released. “Cymbalta’s done very well, but the big headline for Lilly is waiting for prasugrel.”

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August 5, 2008 | Filed Under Cialis Online 
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