Lilly says generic competition hurts profit, sales

INDIANAPOLIS, Tue Jan 29, 2013 — Eli Lilly and Co. said on Tuesday that fourth-quarter profit fell as competition from generic drugs, particularly for its once top-selling schizophrenia drug Zyprexa, drove revenue lower.

The U.S. drugmaker earned $827 million, or 74 cents per share, down from $858 million, or 77 cents per share, a year earlier.

Excluding special items such as asset impairments and restructuring, Lilly earned 85 cents per share. Analysts, on average, expected 78 cents per share.

Revenue dropped by about 1 percent to $5.96 billion, but were above Wall Street expectations of $5.81 billion.

Zyprexa sales slid 49 percent to $385 million from $750 million a year earlier. The company said the sharp drop was partly offset by gains in sales of other drugs and its animal health products.

Lilly forecast that earning would increase this year by 13 percent to 17 percent to $3.82 to $3.97 per share, excluding special items, due to cost controls. Profit will benefit by 7 cents per share due to a research and development tax credit that was delayed until this year due to the late signing of federal legislation.

It predicted sales will be flat to a bit higher this year, in a range of $22.6 billion to $23.4 billion, despite expected generic competition in December for its $5-billion-a-year antidepressant Cymbalta.

Lilly has been battered over the past year by generic forms of Zyprexa. Besides the looming threat from Cymbalta generics, it is girding for copycat forms of its $1 billion-a-year Evista osteoporosis drug that are due to arrive in early 2014.

Cymbalta had sales of $1.42 billion in the fourth quarter, up 20 percent from a year earlier, and a total of $4.99 billion in 2012.

The company hopes to cushion the blow from generics with approvals of some of its 13 experimental drugs now in late-stage trials.

Eli Lilly to stop developing schizophrenia drug

INDIANAPOLIS, Wed Aug 29, 2012 – Eli Lilly and Co. said it would stop developing an experimental schizophrenia drug after a recent analysis showed that a late-stage trial on the drug was likely to fail.

An independent futility analysis concluded that the second late-stage study on the drug was unlikely to meet the main goal of the trial, the company said.

The decision to stop development of the drug was not based on any safety concerns. It is expected to result in a third-quarter charge to R&D expense between $25 million and $30 million, or about 2 cents per share.

However, the company said its previously issued 2012 outlook will remain unchanged.

Another mid-stage trial testing the drug — pomaglumetad methionil, or mGlu2/3 — as an adjunctive treatment with atypical antipsychotics, also failed to meet the main study goal.

Lilly will work with study investigators to ensure an appropriate transition of study participants to continuing clinical care outside of the trials.

The company, which raised its 2012 net profit forecast for the second time in early August, has faced two drug-related setback since then.

On August 24, Lilly said while its Alzheimer’s drug showed signs of slowing mental decline in patients with a mild form of the disease, it failed to meet the trial goals.

The company said last Sunday that its Effient heart drug failed to beat the older product Plavix in a head-to-head clinical study.

Lilly shares were down 0.5 percent at $44.50 in premarket trading. They closed at $44.71 on the New York Stock Exchange on Tuesday.