Eli Lilly & Company (LLY) reported first quarter 2013 adjusted earnings per share of $1.14, well above the Zacks Consensus Estimate of $1.05 and 24% above the year-ago earnings of 92 cents. The year-over-year growth was attributable to the strong performance of several key products and regions that were partially offset by the genericization of Zyprexa, a weaker Japanese yen and a slowdown in some parts of the animal health business. Earnings also benefited from a lower tax rate.
First quarter revenues remained flat at $5.60 billion. However, revenues were slightly below the Zacks Consensus Estimate of $5.67 billion. The Zyprexa patent expiry continued to impact revenues. Sales of Zyprexa, which went off patent in the EU and the US in late 2011, plummeted 49% in the first quarter of 2013.
Reported earnings (including special items) increased 56% to $1.42 per share in the first quarter of 2013.
Quarterly Details
First quarter revenues remained flat with a 4% price increase being offset by lower volume (3%) and unfavorable currency fluctuation (1%). The lower volume was mainly due to the loss of exclusivity for Zyprexa, which is facing competition from several generic players.
US revenues grew 2% to $3.1 billion mainly due to price increases that were partially offset by the loss of market exclusivity of Zyprexa. Ex-US revenues declined 2% to $2.5 billion, mainly due to the loss of exclusivity for Zyprexa, unfavorable currency fluctuation and lower prices.
During the first quarter, Zyprexa recorded a 49% decline in revenues, which came in at $284.8 million. US revenues plummeted 84% due to lower prices. International revenues decreased 30%, mainly due to the loss of market exclusivity in major markets apart from Japan. Zyprexa sales in Japan were affected by the weakening yen.
Products which performed well in the first quarter included Cymbalta (19% growth to $1.3 billion), Cialis (up 11% to $515 million), and Humalog (7% growth to $632.7 million).
Eli Lilly’s Animal Health segment contributed $499.1 million (up 2%) to revenues. Sales declined on a sequential basis. Eli Lilly reported lower demand for food animal products.
Effient revenues remained flat at $115.9 million. While US revenues declined 7% to $83.7 million, due to lower prices and unfavorable wholesaler buying pattern, ex-US revenues increased 24% to $32.2 million driven by higher demand.
Expenses
Eli Lilly’s adjusted operating expenses remained flat at $3 billion. Research and development (R&D) expenses increased 17% to $1.3 billion due to higher late-stage trial costs. Marketing, selling and administrative expenses declined 11% to $1.7 billion reflecting the company’s cost control efforts.