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Lilly's quarterly profit tumbles, but tops Wall Street estimates

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Profit fell at Eli Lilly and Co. in the fourth quarter but not as much as Wall Street analysts were expecting.

The Indianapolis-based drugmaker announced Tuesday morning that it earned $858.2 million, or 77 cents per share, in the three months ended Dec. 31, a 27-percent plunge from the profit it earned in the same quarter a year ago. That’s because Lilly had a full quarter of generic competition for its cancer drug Gemzar, which saw its patent expire in November 2010, and also lost its U.S. and European patents for its bestseller Zyprexa in October 2011.

Lilly also withdrew its severe sepsis drug Xigris from the market late last year, after a new clinical trial showed that it delivered no benefit to patients. The withdrawal shaved 5 cents per share off Lilly’s profit.

Excluding that charge, as well as charges for layoffs Lilly engineered to reduce its costs, the company would have earned 87 cents per share in the fourth quarter, down from $1.11 per share in the same quarter last year. On that basis, analysts were expecting Lilly to earn 81 cents per share, according to a survey by Thomson Reuters.

Lilly CEO John Lechleiter said the company saw better-than-expected sales growth for key drugs—the antidepressant Cymbalta, the insulins Humulin and Humalog, the anti-iimpotence pill Cialis and the lung cancer drug Alimta. Lilly also posted strong growth in Japan, emerging markets and its animal health business.

“Lilly’s fourth quarter results not only reflect the impact of recent patent expirations, but also highlight the growth opportunities that will enable us to remain a strong and successful company in the years ahead,” Lechleiter said in a prepared statement. “Although we anticipated the sales erosion in the fourth quarter resulting from the loss of U.S. patent exclusivity for Zyprexa in late October, I am encouraged by the strong performance of many other areas of our business.”

Revenue for the quarter fell 2 percent to $6.05 billion. Analysts were expecting $5.90 billion.

For all of 2011, Lilly’s revenue rose 5 percent to $24.3 billion, compared with the previous year, but its full-year profit fell 14 percent to $4.3 billion, or $3.90 per share.

Excluding special charges, Lilly would have earned $4.41 per share in 2011, which exceeded its previous profit forecasts of $4.30 to $4.35 per share.

Lilly’s stock price peaked right after the first of the year but has fallen 6 percent since Lilly announced that its 2012 would fall more than analysts expected, to just $3.10 to $3.20 per share. Lilly reaffirmed that profit forecast in its announcement Tuesday.

Lilly’s shares rose 51 cents Tuesday morning, or 1.3 percent, to $39.76 each.

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  1. A couple of issues need some clarification especially since my name was on the list. I am not sure how this information was obtained and from where. For me, the amount was incorrect to begin with and the money does not come to me personally. I am guessing that the names listed are the Principal Investigators (individual responsible for the conduct of the trail) for the different pharmaceutical trials and not the entity which receives the checks. In my case, I participate in Phase II and Phase III trials which are required for new drug development. Your article should differentiate the amount of money received for consulting, for speaking fees, and for conduct of a clinical trial for new drug development. The lumping of all of these categories may give the reader a false impression of physicians just trying to get rich. The Sunshine Law may help to differentiate these categories in the future. The public should be aware that the Clinical Trial Industry could be a real economic driver for Indiana since these revenues supports jobs and new job creation. Nationally, this account for 10-20 billion which our State is missing out on to a large degree. Yes, new drug and technology development has gotten most of the attention (e.g. CTSI, BioCrossroads, etc.) However, serious money is being left on the table by not participating in the clinical trials to get those new drugs and medical devices on the market!!!! I guess that this is not sexy enough for academia.

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