Lilly Forecasts Full-Year Profit Higher Than Estimates

Eli Lilly & Co. (LLY), facing a wave of generic competition, forecast 2013 profit higher than analysts estimated on expectations of increased sales of diabetes treatments and the erectile dysfunction drug Cialis.

Earnings, excluding one-time items, may be $3.75 to $3.90 a share, more than the $3.71 average of 18 analyst estimates compiled by Bloomberg. Profit last year probably met company forecasts of $3.30 to $3.40, the Indianapolis-based drugmaker said today in a statement.

Lilly has been struggling to boost earnings as generic copies take sales from its $5 billion schizophrenia treatment Zyprexa, which lost patent protection in October 2011. Chief Executive Officer John Lechleiter has said profit won’t grow again until after 2014 as the company prepares for competition from copycat products threatening other Lilly drugs.

“Bear in mind for the past two years, Lilly’s initial guidance has proved conservative,” said Mark Schoenebaum, an analyst with ISI Group, in a note to clients.

Lilly rose 3.7 percent to $51.56 at 4 p.m. New York time. The company has gained 27 percent in the past 12 months.

Cymbalta Protection

Lilly will face generic competition in December on its top- selling drug, the antidepressant Cymbalta. The company, racing to get new medicines to market, has 13 compounds in the final stages of testing, including treatments for diabetes, Alzheimer’s disease, and cancer. Earnings next year depend on how many of those get to market, Chief Financial Officer Derica Rice said today on a conference call with analysts.

Photographer: Victor J. Blue/Bloomberg

Eli Lilly & Co. corporate headquarters stand in Indianapolis, Indiana, U.S., on Monday, May 21, 2012. Lilly's experimental once-weekly drug dulaglutide reduced mean 24-hour systolic blood pressure in study presented yesterday at American Society of Hypertension meeting in New York. Close

Eli Lilly & Co. corporate headquarters stand in Indianapolis, Indiana, U.S., on Monday,... Read More

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Photographer: Victor J. Blue/Bloomberg

Eli Lilly & Co. corporate headquarters stand in Indianapolis, Indiana, U.S., on Monday, May 21, 2012. Lilly's experimental once-weekly drug dulaglutide reduced mean 24-hour systolic blood pressure in study presented yesterday at American Society of Hypertension meeting in New York.

“I can’t give you any more specifics on 2014 until we see how some of the cards play out in our pipeline,” Rice said.

For 2014, he said Lilly is positioned to exceed current earnings expectations and will have revenue higher than $20 billion and net income of at least $3 billion.

Net income will be $4.03 to $4.18 a share this year, the company said. Revenue for this year is expected to be $22.6 billion to $23.4 billion.

The company said its reported earnings this year will benefit from the inclusion of a research and development tax credit as part of the American Taxpayer Relief Act of 2012, which was not completed until 2013.

To contact the reporter on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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