Third-quarter profit at Eli Lilly and Co. tumbled due to patent expirations on its best-selling products, coming in below Wall Street’s lowered expectations.
But the Indianapolis-based drugmaker reiterated that it still expects to make the same amount of profit by year-end as it had predicted in July. Lilly expects full-year profit of $2.72 per share to $2.80 per share, excluding extraordinary charges.
Lilly earned $500.6 million in the three months ended Sept. 30, a 58-percent decline from the same period a year ago. Per-share profit was 47 cents in the quarter, down from $1.11 a year ago.
That decline was mainly due to the expiration of U.S. patents on the antidepressant Cymbalta in December, and then the expiration of the drug’s European patents in August. Also, Lilly saw patents on its osteoporosis drug Evista expire earlier this year.
Lilly’s earnings were also depressed due to new fees it paid to the U.S. Food and Drug Administration, accounting charges stemming from its halting of testing for an experimental autoimmune drug, and research partnerships it formed with other drug companies.
Excluding those charges, Lilly would have earned 66 cents per share, a decline of 41 percent from the same quarter last year. Even so, Wall Street analysts were expecting 67 cents per share, according to a survey by Thomson Reuters.
Lilly’s third-quarter revenue fell 16 percent from the same period last year to $4.88 billion. But that was more than the $4.83 billion analysts were expecting.
"While Lilly's third-quarter financial results continue to reflect the impact of recent patent expirations, our clinical pipeline is now producing strong momentum to drive future growth," said John Lechleiter, Lilly's CEO, in a prepared statement.
He noted that in the third quarter, Lilly received FDA approval for three new drugs.
“We are focused on successfully launching this new wave of innovative medicines while still sustaining a steady flow of promising assets in our pipeline,” Lechleiter said.
Investors have warmed to Lilly as its drug pipeline has started to produce new products. So far this year, Lilly shares have risen 27 percent, closing Wednesday at $64.68 per share.