IBJNews

Eli Lilly's shares slip after it forecasts mixed profits in coming years

Back to TopCommentsE-mailPrintBookmark and Share

Investors dumped stock in Eli Lilly and Co. this morning after the company issued a long-term forecast that suggested its profit could tumble after patents expire on several of its bestselling drugs.

Lilly shares fell as much as 4.9 percent, to $34.76 each,  before recovering partially in late-morning trading.

The Indianapolis-based drugmaker expects to post profit of more than $3 billion each year from 2012 to 2014, according to Chief Financial Officer Derica Rice. Those are the years in which Lilly’s blockbusters Zyprexa, Cymbalta, Gemzar, Humalog and Evista could face competition from cheaper generic drugs.

But profit this year is on pace to exceed $4.5 billion and could approach $5 billion.

Lilly spokesman Phil Johnson emphasized that the $3 billion figure is a “minimum threshold.”

Lilly said it expects its earnings per share to grow in the double-digit range through 2011. The drugmaker expects to earn $4.65 to $4.85 per share in 2010, excluding the impact of health care reform and other items. On average, analysts expect income of $4.74 per share, according to a survey by Thomson Reuters.

Lilly said it would launch two new drugs each year beginning in 2013. The company has more than 60 molecules in clinical development, including 25 in mid- and late-stage development.

But since the blockbusters that will lose patent protection make up more than half of Lilly’s current revenue, investors and analysts do not think Lilly’s pipeline can make up the losses.

“Although Lilly has a growing mid-stage pipeline, these assets remain several years away from the market, leaving the company in the difficult position of needing to heavily invest in its next wave of product opportunities at a time of significant erosion,” Chris Schott, a JPMorgan Securities analyst, wrote to clients today, according to Bloomberg News.

In August, Lilly debuted blood thinner Effient in the United States, the company's first new product launch since 2005.

Lilly's fastest-growing product is Alimta, which saw its sales climb 47 percent in the third quarter. Lilly said Thursday it plans to pursue additional indications for the cancer drug, either as monotherapy, or in combination with other oncolytics.

Earlier this year, the Indianapolis company said it would cut annual costs by $1 billion by 2011 by trimming 5,500 workers (13.5 percent of its work force) and producing new drugs faster. Today, Lilly said its U.S. sales force would be 25 percent smaller in 2010 than it was at the beginning of 2009.

Lilly CEO John Lechleiter opened the investor meeting with a presentation meant to convince investors that Lilly’s high-risk strategy is the right one to take.

“We want you to leave this meeting sharing our confidence in our future prospect,” he said.

ADVERTISEMENT

  • Zyprexa litigation

    Eli Lilly sells a drug (Zyprexa) that can cause diabetes and then turn a profit on the drugs that treat the condition that they may have caused in the first place!

    Eli Lilly has made $38 billion on Zyprexa and it was way oversold and caused diabetes and in some cases sudden death.
    Eli Lilly has received a huge criminal fine over their Zyprexa cash cow,add it all up comes to $4.6 billion, in Zyprexa settlements,fines,litigation.

    Did you know that Lilly made $ billions last year on diabetic meds, Actos,Humulin and Byetta?

    They sell a drug that can cause diabetes and then turn a profit on the drugs that treat the condition that they may have caused in the first place!

    ----
    Daniel Haszard Zyprexa whistle-blower

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Can your dog sign a marriage license or personally state that he wishes to join you in a legal union? If not then no, you cannot marry him. When you teach him to read, write, and speak a discernible language, then maybe you'll have a reasonable argument. Thanks for playing!

  2. Look no further than Mike Rowe, the former host of dirty jobs, who was also a classically trained singer.

  3. Current law states income taxes are paid to the county of residence not county of income source. The most likely scenario would be some alteration of the income tax distribution formula so money earned in Marion co. would go to Marion Co by residents of other counties would partially be distributed to Marion co. as opposed to now where the entirety is held by the resident's county.

  4. This is more same-old, same-old from a new generation of non-progressive 'progressives and fear mongers. One only needs to look at the economic havoc being experienced in California to understand the effect of drought on economies and people's lives. The same mindset in California turned a blind eye to the growth of population and water needs in California, defeating proposal after proposal to build reservoirs, improve water storage and delivery infrastructure...and the price now being paid for putting the demands of a raucous minority ahead of the needs of many. Some people never, never learn..

  5. I wonder if I can marry him too? Considering we are both males, wouldn't that be a same sex marriage as well? If they don't honor it, I'll scream discrimination just like all these people have....

ADVERTISEMENT