Strong sales of drugs for diabetes, cancer and animals helped Eli Lilly and Co. overcome falling sales of older drugs for depression and osteoporosis, pushing up fourth-quarter sales and profit.
The Indianapolis-based drug maker posted profit of $478.4 million, or 45 cents a share, up 12 percent from a year ago.
Excluding special items, the company earned 78 cents per share, in line with the average analyst expectation, according to Thomson Reuters.
But the Indianapolis-based company cut its earning guidance for 2016 to a range of $2.84 to $2.93 a share. It had previously said earnings would fall in a range of $2.92 to $3.02 a share.
Revenue for the quarter was $5.37 billion, up 5 percent.
Shares in Lilly dropped 3.6 percent in midmorning trading, to $78.82 each.
In a conference call, CEO John Lechleiter brushed off a question about whether Lilly will be seeking out big mergers or acquisitions, a trend sweeping the industry.
“We’re not interested in any large-scale M&A,” Lechleiter said. “We continue to look for small to medium opportunities.
Sales for the fourth quarter were led by chemotherapy drug Erbitux (up 83 percent), animal health drugs (up 28 percent), and several diabetes drugs, including Trajenta (up 23 percent) and Humalog (up 10 percent).
As expected, sales fell for several drugs that have lost patent exclusivity, including antidepressant Cymbalta (down 39 percent) and osteoporosis drug Evista (down 27 percent).
Cialis, a treatment for erectile dysfunction and a longtime sales powerhouse, saw growth slacken (up only 3 percent).
Lechleiter defended the industry on drug pricing, which has faced intense criticism in recent months for higher prices. “Yes, they’re expensive, but disease is expensive, too,” he said.
The company took charges of $199 million for research and development and $145 million for severance costs related to its acquisition of Novartis Animal Health.
Operating expenses for the quarter climbed 5 percent, to $3.2 billion. That was caused, in part, by higher costs for R&D (up 19 percent, to $1.44 billion). Operating income fell 12 percent, to $912.8 million.