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Lilly Tops Estimates as Cymbalta Sales Counter Zyprexa Drop

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Eli Lilly Profit Slumps, Sales for Schizophrenia Drug Plunge
Lilly is investing in research to overcome patent losses on Zyprexa and other drugs without making a major acquisition. Photographer: JB Reed/Bloomberg

Jan. 31 (Bloomberg) -- Eli Lilly & Co. reported fourth-quarter profit that beat analysts’ estimates as higher sales of its depression and diabetes medicines helped to counter a 44 percent plunge in revenue from the schizophrenia drug Zyprexa.

Net income fell 27 percent to $858.2 million, or 77 cents a share, the Indianapolis-based company said today in a statement. Profit excluding one-time items beat by 6 cents the average of 17 analyst estimates compiled by Bloomberg.

Revenue from the antidepressant Cymbalta rose 20 percent and the diabetes treatment Humalog 21 percent, helping offset sales of Zyprexa that the drugmaker said on Jan. 5 was declining faster than expected in the face of generic competition. Lilly has treatments for diabetes, cancer and Alzheimer’s disease in final-stage trials.

The depression and diabetes drugs “all hung in there pretty well,” said Seamus Fernandez, an analyst at Leerink Swann, by telephone. While margins were just “a little better” than expected, “they basically beat relative to expectations.”

Lilly rose 1.3 percent to $39.74 at the close of New York trading.

Revenue fell 2 percent to $6.05 billion, higher than the $5.88 billion that analysts had projected, according to estimates compiled by Bloomberg. Zyprexa sales declined 44 percent to $749.6 million, while revenue for the antidepressant Cymbalta rose to $1.18 billion and Humalog for diabetes grew to $662 million.

Reaffirmed Forecast

Research and development expenses declined 6 percent. The company reaffirmed its 2012 forecast of $3.10 to $3.20 a share.

Lilly said a data-monitoring committee recommended that two final-stage trials of the company’s Alzheimer’s drug solanezumab would continue as planned. Lilly expects to get the results from the trials later this year.

“The Alzheimer’s data is going to be the biggest thing they are going to report this year,” said Damien Conover, an analyst at Morningstar Inc. in Chicago, in a phone interview before the results were announced.

The decision to continue the trials means at least one of the main efficacy measures in one of the studies had a greater than 30 percent chance of turning out positive, Jan Lundberg, Lilly’s executive vice president for science and technology, said on a conference call with analysts.

There are two main efficacy goals in each trial, one focusing on cognitive function and another assessing patients’ ability to perform daily activities, he said on the call.

“The most important thing for Lilly is that the solanezumab trial wasn’t stopped,” Fernandez said.

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

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