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Lilly Posts Loss Amid Zyprexa Settlement

By Reuters
Published | Updated

NEW YORK – Drugmaker Eli Lilly and Co. (LLY) Thursday reported a second-quarter net loss after taking a hefty charge for a product liability settlement and legal costs related to its schizoprenia drug Zyprexa.

Excluding the settlement and related charges, Lilly posted earnings of $728 million, or 67 cents per share, in line with Wall Street's forecast.

Lilly last month reached a settlement with attorneys representing some 7,000 affected users of Zyprexa who sued the company alleging the drug increased their risk of diabetes or related diseases. The drug tends to increase weight, a risk factor for diabetes.

Lilly maintains that the claims are without merit.

Worldwide Zyprexa (search) sales fell 10 percent to $1.097 billion for the quarter, with U.S. sales off by 21 percent due to fierce competition and health concerns. But the company said current U.S. prescription volume trends point to a second-half improvement.

The Indianapolis-based drugmaker expects third-quarter earnings of 70 cents to 72 cents per share, with full-year profit of $1.90 to $1.96 a share, which represents 14 percent to 18 percent earnings growth.

Lilly Chief Executive Sidney Taurel said the company "expects sales and earnings growth acceleration in the second half of the year as sales for our portfolio of newer products continue to grow."

Sales of osteoporosis drug Forteo surged 56 percent to $109.9 million, while Viagra rival Cialis (search), which Lilly shares with Icos Corp. , rose 39 percent to $190.9 million.

Lilly's new antidepressant Cymbalta had sales of $161.4 million, up 51 percent from the previous quarter.

But sales of attention deficit disorder medicine Strattera (search) fell 31 percent to $123.5 million due to a decrease in prescriptions written and cutbacks in purchases by wholesalers.

Sales of Lilly's portfolio of diabetes drugs fell slightly to $669.4 million from $674.9 million a year ago.

Total sales for the second quarter grew 3 percent to $3.668 billion, but 2 percent of the was the result of favorable foreign exchange rates.