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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowMoody's Investors Service on Friday lowered its rating outlook on drugmaker Eli Lilly and Co. to "negative"
from "stable," due in part to the looming expiration of patents protecting key drugs from generic competition.
The Indianapolis drugmaker will lose patent protection for its top-seller, the antipsychotic Zyprexa, next year. It also
faces in 2013 patent expirations for its second-best seller, the antidepressant Cymbalta, and two other drugs that bring in
more than a billion dollars in annual sales, the cancer treatment Gemzar and the insulin Humalog.
Moody's said the expirations create the potential for several years of negative earnings growth. The ratings service
also called the launch of Lilly's blood thinner Effient disappointing. Lilly started selling the drug last August, and
it registered only $8.8 million in sales in the first quarter of 2010.
"Pressure on Lilly's strong credit rating is steadily building, driven by upcoming patient expirations, high U.S.
health-care reform costs, and the slow launch of Effient," Moody's Senior Vice President Michael Levesque said in
a statement.
Moody's also affirmed its A1 long-term rating and Prime-1 short-term rating for the company. It said those affirmations
reflect the company's strong profit margins, steady free cash flow and "good scale and market presence in the global
pharmaceutical industry."
Lilly shares fell 59 cents to $32.75 in Friday afternoon trading.
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