NEW YORK – Eli Lilly and Co. (LLY) on Monday said first-quarter earnings excluding costs from an acquisition rose sharply, beating forecasts, as new drugs helped push sales 17 percent higher.
"Sales of virtually every product looked strong," said Lehman Brothers analyst Tony Butler, who added that the company's half-dozen new medicines "ought to lead to really strong earnings growth over time."
Net profit, including charges for the purchase of biotechnology company Applied Molecular Evolution (search), fell to $400 million, or 37 cents per share, from $407 million, or 38 cents a share, a year earlier. The 2003 quarter included $350 million in charges for restructuring and asset write-offs.
Excluding charges, Lilly earned 70 cents per share, compared with 61 cents a share a year earlier. That compares with the average forecast of 66 cents per share among analysts polled by Reuters Research, a unit of Reuters Group Plc.
The company posted a gain of 2 cents per share from its divestiture of some older products, a main reason it surpassed Wall Street expectations, said Deutsche Bank analyst Barbara Ryan.
"New drugs are the big story at Lilly and were certainly another contributing factor during the quarter," Ryan said.
Lilly, considered to have one of the industry's best lineups of experimental drugs, has launched six new medicines since late 2002 that accounted for 9 percent of quarterly sales. It expects U.S. approval by summer for anti-depressant Cymbalta (search), which some analysts think could become a blockbuster.
The new treatments include Strattera for attention deficit disorder, which had revenue of $141 million, and impotence treatmentCialis (search), which was approved in November and had sales of $108 million.
Global revenue jumped 17 percent to $3.38 billion, including a benefit of 5 percent from the weak dollar, which increases the value of overseas sales when they are converted into dollars.
Schizophrenia treatment Zyprexa (search) and a new pill that combines the drug with Lilly's antidepressant Prozac posted sales of $1.13 billion, 18 percent higher than Zyprexa alone in the year-ago period.
Gemzar, a treatment for lung and pancreatic cancer, jumped 19 percent to $279 million. But, like Zyprexa, almost all the growth came from outside the United States. Global sales of diabetes drugs rose 8 percent to $681 million, but slipped 1 percent in the United States.
Lilly is relying on growth from those stalwart older drugs and demand for its new medicines to restore strong earnings growth, which vanished when cheaper generic forms of Prozac hit U.S. drugstores in August 2001.
The company affirmed it expects 2004 earnings of $2.80 to $2.85 per share, excluding special items. For the second quarter, the company expects earnings of 67 cents to 69 cents per share, in line with Wall Street forecasts.