Nine percent revenue growth driven by higher volume continues strong trend for the year.21 percent of Q2 revenue invested in R&D to advance pipeline of nearly 70 potential new medicines in clinical development.Ongoing cost-containment efforts support double-digit growth in operating income.Q2 earnings per share grow to $1.22 (reported), or $1.24 (non-GAAP).2010 earnings per share guidance range raised to $4.44 to $4.59 (reported), or $4.50 to $4.65 (non-GAAP), following strong first-half results.
Eli Lilly and Company (NYSE:LLY - News) today announced financial results for the second quarter of 2010.
$ in millions, except per share data
'Lilly continued to deliver solid financial results in the second quarter, driven by volume-based revenue gains and ongoing cost-containment efforts that resulted in double-digit earnings growth,' said John C. Lechleiter Ph.D., Lillys chairman and chief executive officer. 'Were pleased with these results and the opportunities they create. This strong financial performance enables us to fund our R&D pipeline of nearly 70 clinical stage assets and make strategic acquisitions in order to deliver an increased number of innovative medicines to patients in the future.'
The company signed a definitive merger agreement to acquire Alnara Pharmaceuticals, Inc., a privately-held company developing protein therapeutics for the treatment of metabolic diseases. Alnaras lead product in development is liprotamase, a non-porcine pancreatic enzyme replacement therapy (PERT). Liprotamase is under review by the U.S. Food and Drug Administration for the treatment of exocrine pancreatic insufficiency (EPI).The company signed a development and exclusive license agreement with Marcadia Biotech, Inc. for Marcadias short-acting glucagon program, covering glucagon analogs that may provide greater convenience and ease-of-use for the treatment of severe hypoglycemia. The program includes MAR531, a glucagon analog that is in preclinical development.The company, along with its partners Amylin Pharmaceuticals, Inc. and Alkermes, Inc., announced that the U.S. Food and Drug Administration (FDA) classified the Bydureon? complete response as a Class 2 resubmission and assigned a new Prescription Drug User Fee Act (PDUFA) action date of October 22, 2010.The company, along with its partner, Kowa Pharmaceuticals America Inc., announced the launch of Livalo? in the United States. Livalo is indicated for adults as an adjunctive therapy to diet for the treatment of primary hyperlipidemia or mixed dyslipidemia.The company announced a new partnership with Walmart to provide a co-branded insulin product for people with diabetes. Beginning in mid-September, Lillys Humulin? brand of biosynthetic human insulin will be available in Walmart pharmacies across the U.S. under the dual-branded name Humulin? ReliOn?.
In the second quarter of 2010, worldwide total revenue was $5.749 billion, an increase of 9 percent compared with the second quarter of 2009. This 9 percent revenue growth was comprised of an increase of 5 percent due to higher volume, 2 percent due to higher prices and 1 percent due to the impact of foreign exchange rates (numbers do not add due to rounding). Total revenue in the U.S. increased 8 percent to $3.262 billion due to higher prices and, to a lesser extent, increased volume. Total revenue outside the U.S. increased 9 percent to $2.487 billion due to increased demand and, to a lesser extent, the favorable impact of foreign exchange rates outside the Euro zone, partially offset by lower prices. Second-quarter 2010 total revenue was reduced by approximately $70 million due to the impact of U.S. health care reform.
Gross margin increased 9 percent, in-line with total revenue growth. Gross margin as a percent of total revenue was 82.2 percent, which was essentially flat compared to the second quarter of 2009.
In the second quarter of 2010, the company recognized a charge of $27.3 million for restructuring primarily related to severance and other related costs from previously announced strategic actions that the company is taking to reduce its cost structure and global workforce. In the second quarter of 2009, the company incurred a special pretax charge of $105.0 million in connection with the settlement of several states litigation claims involving Zyprexa.
Other income (expense) improved $5.7 million, to a net expense of $18.4 million, primarily due to lower net interest expense.
The effective tax rate was 22.3 percent in the second quarter of 2010, compared with an effective tax rate of 21.1 percent in the second quarter of 2009, due to the expiration of the R&D tax credit in the U.S. at the end of 2009.
Net income and earnings per share increased to $1.349 billion and $1.22, respectively, compared with second-quarter 2009 net income of $1.159 billion and earnings per share of $1.06.
For purposes of non-GAAP reporting, items totaling $.02 and $.06 per share for the second quarters of 2010 and 2009, respectively, have been excluded. For further detail, see the reconciliation below as well as the footnotes to the non-GAAP income statement later in this press release.
$1.22
$1.06
.02
$1.24
$1.12
For the first six months of 2010, worldwide total revenue increased 9 percent to $11.234 billion, compared with the same period in 2009. Reported net income and earnings per share were $2.597 billion and $2.35, respectively. Net income and earnings per share, on a non-GAAP basis, were $2.664 billion and $2.41, respectively.
For purposes of non-GAAP reporting, items totaling $.06 per share for the first six months of both 2010 and 2009 have been excluded. For further detail, see the reconciliation below as well as the footnotes to the non-GAAP income statement later in this press release.
$2.35
$2.25
$2.41
$2.31
(Dollars in millions)
Zyprexa?
$1,262.9
$1,203.2
$2,477.9
$2,326.2
867.7
744.4
17%
1,670.9
1,453.7
Alimta?
551.8
385.3
43%
1,079.2
720.6
50%
504.6
477.5
6%
1,011.0
928.0
418.7
363.6
827.0
722.4
293.4
353.2
(17)%
581.2
721.0
(19)%
265.2
248.1
523.0
488.7
7%
Evista?
259.5
251.3
501.1
508.2
(1)%
Forteo?
209.6
203.3
404.1
390.7
147.1
142.8
293.5
301.7
(3)%
$11,234.2
$10,339.8
In the second quarter of 2010, Zyprexa sales totaled $1.263 billion, an increase of 5 percent compared with the second quarter of 2009.U.S. sales of Zyprexa increased 10 percent to $638.2 million, driven by higher prices, partially offset by lower demand. Zyprexa sales in international markets increased 1 percent, to $624.7 million, driven by the favorable impact of foreign exchange rates and higher demand, offset by lower prices.
For the second quarter of 2010, Cymbalta generated $867.7 million in sales, an increase of 17 percent compared with the second quarter of 2009. U.S. sales of Cymbalta increased 14 percent, to $707.9 million, driven by higher prices and higher volume. Sales outside the U.S. were $159.8 million, an increase of 30 percent, driven by higher demand, including recent launches in Japan and Canada.
For the second quarter of 2010, Alimta generated sales of $551.8 million, an increase of 43 percent compared with the second quarter of 2009. U.S. sales of Alimta increased 28 percent, to $253.6 million, due to increased demand. Sales outside the U.S. increased 60 percent, to $298.3 million, due to increased demand. Demand outside the U.S. was favorably impacted by the approval in the second quarter of 2009 of the non-small cell lung cancer indication in Japan.
For the second quarter of 2010, worldwide Humalog sales increased 6 percent, to $504.6 million. Sales in the U.S. increased 3 percent to $299.7 million, driven by higher volume, partially offset by lower net effective selling prices. Sales outside the U.S. increased 10 percent to $205.0 million, driven by higher demand and, to a lesser extent, the favorable impact of foreign exchange rates.
Worldwide Humulin sales increased 7 percent in the second quarter of 2010, to $265.2 million. U.S. sales increased 21 percent to $115.3 million, driven by increased prices and, to a lesser extent, increased demand. Sales outside the U.S. decreased 2 percent, to $150.0 million, driven by lower prices, partially offset by the favorable impact of foreign exchange rates.
Evista sales were $259.5 million in the second quarter of 2010, a 3 percent increase compared with the second quarter of 2009. U.S. sales of Evista increased 4 percent to $175.6 million, as a result of higher prices, partially offset by lower demand. Sales outside the U.S. increased 1 percent to $83.9 million, driven by the favorable impact of foreign exchange rates, offset by lower demand.
Second-quarter sales of Forteo were $209.6 million, a 3 percent increase compared with the second quarter of 2009. U.S. sales of Forteo remained flat, at $131.4 million as higher net effective selling prices were offset by lower demand.Sales outside the U.S. increased 10 percent, to $78.2 million, due primarily to higher demand.
During the second quarter of 2010, Strattera generated $147.1 million of sales, an increase of 3 percent compared with the second quarter of 2009. U.S. sales decreased 5 percent to $100.4 million, due to decreased demand, partially offset by higher net effective selling prices. Sales outside the U.S. increased 26 percent, to $46.7 million, driven by increased demand. Demand outside the U.S. was favorably impacted by the 2009 launch in Japan.
Byetta?
Lilly recognizes in revenue its 50 percent share of Byettas gross margin in the U.S., 100 percent of Byetta sales outside the U.S., and its sales of Byetta pen delivery devices to its partner, Amylin Pharmaceuticals. For the second quarter of 2010, Lilly recognized total revenue of $106.9 million for Byetta, a decrease of 7 percent.
Worldwide sales of Byetta were $178.8 million in the second quarter of 2010, a 13 percent decrease compared with the second quarter of 2009, due to competitive pressures in the U.S. and German markets. U.S. sales of Byetta decreased 20 percent to $140.7 million compared with the second quarter of 2009, while sales of Byetta outside the U.S. grew 24 percent to $38.1 million.
Erbitux?
Lilly recognizes net royalties received from its Erbitux collaboration partners and revenue from manufactured product sold to these partners. For the second quarter of 2010, Lilly recognized total revenue of $103.8 million for Erbitux, an increase of 4 percent.
Effient?
Worldwide Effient sales were $22.9 million in the second quarter of 2010, up from $8.8 million in the first quarter of 2010. U.S. Effient sales were $16.3 million. Sales outside the U.S. were $6.6 million.
Worldwide sales of animal health products in the second quarter of 2010 were $324.2 million, an increase of 18 percent compared with the second quarter of 2009. U.S. sales grew 20 percent, to $185.0 million, primarily due to higher demand. Sales outside the U.S. increased 15 percent, to $139.1 million, driven by increased demand and the favorable impact of foreign exchange rates.
Following strong performance in the first six months of 2010, the company has raised its 2010 earnings per share guidance to a range of $4.44 to $4.59 on a reported basis and $4.50 to $4.65 on a non-GAAP basis, excluding potential restructuring charges primarily related to severance and other related costs from previously announced strategic actions that the company is taking to reduce its cost structure and global workforce. The company has also revised certain other elements of its full-year 2010 financial guidance.
$4.44 to $4.59
$3.94
13% to 16%
.13
.29
associated with Acrux (2010) and Incyte
(2009) licensing agreements
.05
$4.50 to $4.65
$4.42
2% to 5%
Numbers in the 2009 column do not add due to rounding.
The company still expects volume-driven revenue growth in the mid-single digits, driven primarily by Alimta, Cymbalta, Humalog, Cialis and Effient.
The company now anticipates that gross margin as a percent of revenue will be flat to increasing. Excluding the effect of foreign exchange rates on international inventories sold, the company still expects gross margin as a percent of revenue to increase.
Other income is still expected to be a net expense of between $50.0 and $100.0 million, and the tax rate is still expected to be approximately 23 percent.
As previously announced, investors and the general public can access a live webcast of the second-quarter 2010 financial results conference call through a link on Lillys website at [点击这里]www.lilly.com. The conference call will be held today from 9:00 a.m. to 10:00 a.m. Eastern Daylight Time (EDT) and will be available for replay via the website through August 20, 2010.
Lilly, a leading innovation-driven corporation, is developing a growing portfolio of pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers – through medicines and information – for some of the worlds most urgent medical needs. Additional information about Lilly is available at [点击这里]www.lilly.com; Lillys clinical trial registry is available at [点击这里]www.lillytrials.com.
This press release contains forward-looking statements that are based on managements current expectations, but actual results may differ materially due to various factors. There are significant risks and uncertainties in pharmaceutical research and development. There can be no guarantees with respect to pipeline products that the products will receive the necessary clinical and manufacturing regulatory approvals or that they will prove to be commercially successful. The companys results may also be affected by such factors as competitive developments affecting current products; rate of sales growth of recently launched products; the timing of anticipated regulatory approvals and launches of new products; regulatory actions regarding currently marketed products; other regulatory developments and government investigations; patent disputes and other litigation involving current and future products; the impact of governmental actions regarding pricing, importation, and reimbursement for pharmaceuticals, including U.S. health care reform; changes in tax law; asset impairments and restructuring charges; acquisitions and business development transactions; and the impact of exchange rates and global macroeconomic conditions. For additional information about the factors that affect the companys business, please see the companys latest Form 10-Q filed April 2010 and Form 10-K filed February 2010. The company undertakes no duty to update forward-looking statements.
Alimta? (pemetrexed, Lilly)
Bydureon? (exenatide for extended-release injectable suspension, Amylin Pharmaceuticals)
Byetta? (exenatide injection, Amylin Pharmaceuticals)
Effient? (prasugrel, Lilly)
Erbitux? (cetuximab, ImClone Systems, Lilly)
Evista? (raloxifene hydrochloride, Lilly)
Forteo? (teriparatide of recombinant DNA origin injection, Lilly)
Humulin? (human insulin of recombinant DNA origin, Lilly)
Zyprexa? (olanzapine, Lilly)
June 30, 2010
December 31, 2009
39,200
40,360
50.0
Asset impairments, restructuring and other special charges
27.3
(74)%
53.5
(49)%
1,754.9
1,491.8
3,388.2
3,245.9
1,736.5
1,467.7
3,444.3
3,151.1
387.6
309.2
847.3
679.5
2,597.0
2,471.6
1.22
1.06
14%
1,782.2
1,596.8
3,491.7
3,350.9
1,763.8
1,572.7
3,547.8
3,256.1
396.9
346.0
15%
883.3
716.3
23%
2,664.5
2,539.8
5%
1.24
1.12
(b) The second quarter and year-to-date 2009 financial statements have been adjusted to eliminate a special pretax charge of $105.0 million, or $0.06 per share (after-tax), in connection with several states litigation claims involving Zyprexa.
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