Third-quarter profit at Eli Lilly and Co. topped Wall Street estimates on strong international sales, and the company raised its profit forecast for the year.
The Indianapolis-based drugmaker earned $1.3 billion in the quarter ended Sept. 30, up 38 percent from the same period last year. Excluding extraordinary items from a year ago, Lilly’s profit was up 2 percent.
Lilly earned $1.18 per share—or $1.21 excluding special charges—beating analyst estimates of $1.15 per share, according to a survey by Thomson Reuters.
Lilly’s revenue for the quarter also rose 2 percent, to $5.65 billion. However, analysts expected revenue of $5.79 billion.
The company said its slower-than-expected revenue growth turned into higher-than-expected profits because of its cost-containment measures, which have included mass layoffs in the last year. Also, the company said new rules issued about the health reform law passed this year in the United States suggest the law will have less of an impact than previously thought.
"Japan performed particularly well in the quarter, growing revenue by 27 percent, driven by recent product launches. Strong performance was also seen in key emerging market countries, including China,” Lilly CEO John Lechleiter said in a statement. “Based upon our strong worldwide year-to-date results and lower estimates of the impact of U.S. health care reform, we have once again raised our earnings guidance for the year."
Lilly raised its full-year profit forecast for a second time this year. It now expects to earn $4.55 to $4.65 per share, up from a range of $4.44 to $4.59 per share predicted in July.
However, Lilly’s record profits continue to be overshadowed by its setbacks on bringing new drugs to market.
On Tuesday night, the U.S. Food and Drug Administration ordered a study of heart risks of Bydureon, a once-weekly version of the diabetes medicine Byetta that Lilly and two partners companies were hoping to bring to market shotly. Now they face a delay of at least 20 months. That announcement caused Moody’s Investor Service to consider downgrading its rating of Lilly’s bonds and financial strength.
Then on Wednesday night, Lilly and a development partner announced that an experimental drug to treat Type I diabetes failed to improve patients’ blood sugar levels. They are halting the Phase 3 clinical trial of the drug, known as tepluzimab.
Lechleiter showed no signs of swerving from Lilly’s strategy of bringing new drugs to market, rather than doing a merger to help absorb revenue losses from its looming patent expirations.
"Although we are disappointed by recent pipeline setbacks, we remain committed to our strategy of accelerating the flow of innovative new medicines that provide improved outcomes for individual patients,” he said in a statement. “We believe that this strategy, while not without risk, will provide the greatest value to our shareholders and the patients we serve."