Drugmaker Eli Lilly's 3Q profit falls 5 percent

[October 20, 2011]  INDIANAPOLIS (AP) -- Drugmaker Eli Lilly and Co. said Thursday its third-quarter net income fell 5 percent because marketing and other expenses rose in its last quarter before losing patent protection for its top-selling drug, the anti-psychotic Zyprexa.

The Indianapolis company also lifted the low end of its 2011 earnings forecast.

Lilly reported net income of $1.24 billion, or $1.11 per share, in the quarter that ended Sept. 30. That's down from $1.3 billion, or $1.18 per share, in last year's third quarter. Revenue climbed 9 percent to $6.15 billion.

Excluding some restructuring charges, adjusted profit was $1.13 per share, and that matched Wall Street expectations. Analysts surveyed by FactSet expected, on average, earnings of $1.13 per share on $6.07 billion in revenue.

Zyprexa revenue slipped 3 percent to $1.18 billion as U.S. sales volume fell. The U.S. patent protecting the drug from generic competition expires Sunday.

Analysts question Lilly's ability to overcome that and the loss of some other key patents in the next few years and maintain its quarterly dividend. The company has said it will rely on its pipeline of drugs under development, emerging markets like China and sales in countries like Japan to overcome the loss of revenue.

Revenue from Lilly's second-best seller, the antidepressant Cymbalta, climbed 29 percent to $1.07 billion in the third quarter, helped mostly by higher prices and demand.

The company's cost of sales climbed 35 percent to $1.34 billion.

For the full year, Lilly now expects adjusted earnings of $4.30 to $4.35 per share, compared with its forecast in July for earnings of $4.25 to $4.35.

[Associated Press]

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