Health Care and Eli Lilly and Co. and Health Care Businesses and Health Care & Life Sciences and Health Care & Insurance

Lilly to book $790M Amylin payment in third quarter

August 9, 2012

Eli Lilly and Co. will book about $790 million in pretax income in the third quarter thanks to an early payment from former drug development partner Amylin Pharmaceuticals.

Lilly, based in Indianapolis, said Thursday that Amylin made a payment to satisfy its revenue-sharing obligation over the diabetes treatment exenatide, which goes by the brand names Byetta and Bydureon. The payment came after Lilly competitor Bristol-Myers Squibb Co. finished its $5 billion acquisition of Amylin.

Lilly also has received a pretax payment of about $425 million from Amylin, but it won't recognize that on its income statement until next year because the company is still transferring Byetta and Bydureon rights to Amylin, a spokesman said.

Amylin and Lilly said last year they were ending their long-standing collaboration to develop diabetes drugs, and they were resolving a lawsuit Amylin had filed over Lilly's collaboration with German drugmaker Boehringer Ingelheim.

Lilly is the world's 11th largest drugmaker by annual revenue, according to 2011 rankings from drug data firm IMS Health.

The Amylin payments will help as it faces a big revenue slide due to the loss of patents protecting several key drugs over the next few years.

Last year, Lilly earned $4.35 billion, or $3.90 per share, on $24.29 billion in revenue. The company expects to record annual net income of at least $3 billion and revenue of at least $20 billion through 2014.

For 2012, Lilly said Thursday it still expects adjusted earnings to range between $3.30 and $3.40 per share on revenue of between $21.8 billion and $22.8 billion.

Analysts forecast, on average, earnings of $3.38 per share on $22.67 billion in revenue, according to FactSet.

Lilly shares fell 6 cents, to $42.79 each, in afternoon trading, while broader trading indexes also dripped slightly. Its shares have traded in a 52-week range of $33.75 to $44.67 per share.

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