Lily Rises on Jardiance Market Share Gain as Outlook Disappoints

  • Drugmaker gave 2016 forecasts that fell short of estimates
  • Guidance weak but growth should be `robust,' analyst says

Eli Lilly & Co. rose after saying that patients flocked to its diabetes drug Jardiance since data showed the therapy cut deaths from heart attacks and strokes.

Jardiance’s market share among new patients rose to 25 percent from 15 percent following the release of the data last year, Enrique Conterno, head of the drugmaker’s diabetes unit, said on a call with investors Tuesday. Shares rose 1 percent to $83.72 at 12:06 p.m. in New York, after increasing as much as 3.1 percent, the biggest intraday gain in a month.

Conterno made the comments on Lilly’s guidance call to update investors about what it expects in 2016. The drugmaker, which has promised to return to growth after half a decade of falling revenue, gave forecast ranges for sales and earnings that both fell short of analysts’ estimates.

“The guidance was on the weaker end both on revenues and EPS, but growth overall in 2016 should be robust versus peers,” Tim Anderson, an analyst at Sanford C. Bernstein & Co. who rates the shares outperform, wrote in a note to clients.

Sales this year will be $20.2 billion to $20.7 billion, and earnings excluding one-time items will be $3.45 to $3.55 a share, the Indianapolis-based drugmaker said in a statement. Analysts have predicted revenue of $21.4 billion and adjusted earnings of $3.65 a share, according to data compiled by Bloomberg. At the high end of the ranges, sales would rise 3.9 percent compared with the 2015 revenue anticipated by analysts, while earnings per share would gain 3.2 percent.

After losing patent protection for two of its biggest drugs in 2011 and 2013, Lilly began its comeback last year, beating analysts’ earnings estimates in the first three quarters. For the quarter ending Sept. 30, key drugs exceeded expectations as the insulin Humalog and Cialis for erectile dysfunction both brought in more than projected. It’s brought to market Jardiance and other diabetes medicines and is pushing ahead with projects in cancer and Alzheimer’s disease.

Humalog pricing will be mostly unchanged this year, David Ricks, the company’s head of bio-medicines, said on the call. Lilly has more ability to raise prices in other areas, he said.

Lilly maintained its 2015 adjusted earnings forecast for 2015 of $3.40 to $3.45 a share. This year, marketing, selling and administrative expenses are expected to be $6 billion to $6.2 billion. Research and development expenses are forecast between $4.8 billion and $5 billion, the company said.