Eli Lilly & Co. said first-quarter profit exceeded analysts’ estimates as the company cut jobs and had a lower tax rate from the reinstatement of a research and development credit.
Earnings excluding one-time items were $1.14 a share, beating by 9 cents the average of 16 analysts’ estimates compiled by Bloomberg. Net income rose 53 percent to $1.55 billion, or $1.42 a share, helped by a diabetes drug deal with Amylin Pharmaceuticals LLC, Indianapolis-based Lilly said today in a statement.
Revenue was unchanged at $5.6 billion as higher prices helped offset a drop in prescriptions for the schizophrenia drug Zyprexa, which brought in $5 billion a year before generic copies came on the market in 2011. The company is cutting hundreds of jobs as it prepares for the patent loss of its top-seller Cymbalta at the end of the year. Investors have been focused on Lilly’s earnings after the biotechnology company Amgen Inc. posted lower than expected revenue yesterday.
“Lilly reported what appears to be a generally good quarter,” said Mark Schoenebaum, an analyst with ISI Group in New York. “Hopefully this reasonably clean print will help offset some of the fear that the poor Amgen quarter last night may have instilled in the hearts of pharma, biotech investors given this year’s massive outperformance.”
Lilly fell 3.9 percent to $56.05 at the close in New York. The shares have gained 40 percent in the past 12 months.
Lilly Chief Executive Officer John Lechleiter has said the company is counting on new medicines to help revive growth. Lilly said today it has begun a rolling submission with the Food and Drug Administration for the stomach-cancer treatment ramucirumab and plans to seek approval for five medicines this year.
The company benefited in the first quarter from a 2012 U.S. research tax credit that wasn’t renewed until January. Lilly said its effective tax rate in the quarter was 20.7 percent when the one-time impact of the tax credit for 2012 was accounted for, compared to a rate of 24.3 percent in the same period a year earlier.
Lilly also had an additional $495 million gain from transferring rights outside the U.S. for the diabetes treatment exenatide to Amylin.
Lilly reaffirmed its 2013 earnings forecast. The company said in January it expected earnings excluding one-time items to be $3.82 to $3.97 a share.
Sales of Cymbalta rose 19 percent to $1.33 billion in the quarter and revenue from the erectile dysfunction drug Cialis was up 11 percent to $515 million.
Zyprexa sales fell 49 percent to $284 million.