Eli Lilly & Co. (LLY) Chief Executive Officer John Lechleiter said rising sales of the antidepressant Cymbalta and animal drugs stemmed losses from generic competition, helping the company’s earnings beat estimates.
Net income declined 4 percent to $1.01 billion, or 91 cents a share, in the first quarter, the Indianapolis-based company said today in a statement. Profit excluding one-time items beat by 13 cents the average estimate of 18 analysts surveyed by Bloomberg. The company raised its 2012 earnings forecast.
Revenue dropped 4 percent to $5.6 billion, hurt by declining sales for the antipsychotic Zyprexa after copies of the drug were allowed on the market in the fourth quarter. Lilly has slashed more than $1 billion in costs and fired 5,500 employees in anticipation of the drop in revenue. The company doesn’t plan to initiate new cost cuts, and investors should be prepared for several years of declining sales, Lechleiter said.
“This is a company that is facing a period of several years where we will suffer the loss of several patents,” Lechleiter said today in a telephone interview. “Buying Lilly today means you’re investing in our pipeline and that is going to be the means that we emerge and resume growth.”
Lilly has 12 drugs in late-stage testing including an experimental treatment for Alzheimer’s, which Lilly will report results on in the second half of the year, Lechleiter said.
Lilly gained 2 percent to $40.80 at 4 p.m. New York time. The stock has risen 13 percent in the past 12 months.
Sales of Cymbalta increased 23 percent to $1.1 billion. Lilly also reported revenue growth of 41 percent in China, the company’s fastest-growing market. Zyprexa sales fell 56 percent to $563 million.
Revenue also benefited from a 33 percent gain in sales from its Elanco Animal Health unit, the company said.
Lechleiter said he has no plans to sell the company’s animal business. Pfizer Inc. is considering a sale or spinoff of its animal unit. Lechleiter declined to comment on whether Lilly would be interested in buying Pfizer’s division.
Lilly raised its 2012 adjusted earnings forecast to $3.15 to $3.30 a share from $3.10 and 3.20 a share. Sales are set to drop as much as 10 percent to $21.8 billion to $22.8 billion, the company said.
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