Lilly Reports $3.63 Billion Loss After Imclone Deal
The net loss amounted to $3.31 a share and compares with a profit of $854.4 million, or 78 cents a share, a year earlier, the Indianapolis-based company said today in a statement. Sales increased slightly to $5.21 billion from $5.19 billion, missing estimates of $5.39 billion.
Lilly bought ImClone on Nov. 25 to add the cancer medicine Erbitux and experimental drugs to bolster revenue before the 2011 patent expiration of the antipsychotic Zyprexa, the companys top revenue producer with $4.7 billion in sales last year. Lilly faces a U.S. Food and Drug Administration panel on Feb. 3 to discuss its experimental blood-thinner, prasugrel.
“Growth for key drugs is moderating,” said Barbara Ryan, an analyst at Deutsche Bank Securities in Greenwich, Connecticut, in a note to clients today. “Lillys near-term earnings per share growth prospects will be tempered by the dilutive impact of the ImClone acquisition and are vulnerable longer term to the patent expirations on important and profitable drugs.”
Lilly fell $1.12, or 2.9 percent, to $37.97 at 4:01 p.m. in New York Stock Exchange composite trading. The stock has declined 27 percent in the last 12 months, compared with a 21 percent decline in the Standard & Poors 500 Health Care Index.
Beat Analysts Estimates
Fourth quarter earnings excluding the acquisition and other items were $1.07 a share, beating the average estimate of $1.05 by 15 analysts surveyed by Bloomberg.
Lilly reiterated its 2009 earnings forecast of $4 to $4.25 a share. The company said it will earn $4.35 to $4.55 a share, when the ImClone purchase is excluded.
Worldwide sales were reduced 3 percentage points from converting foreign income into U.S. dollars, the company said. In 2008, the dollar rose 6.1 percent against a basket of six foreign currencies.
Prasugrel has been twice delayed by the U.S. Food and Drug Administration. The panel, whose decisions are typically adopted by the FDA, will meet to discuss the benefits of the drug and the risk of excessive bleeding from it. Prasugrel may reach $950 million in annual sales by 2015, said Tim Anderson, an analyst at Sanford C. Bernstein in New York. Japan-based Daiichi Sankyo is Lillys partner on the drug.
Fresh Competition
Zyprexa faced fresh competition this year after lower-priced generic copies of Johnson & Johnsons Risperdal, a competing treatment, went on sale in July. Sales of the drug fell 10 percent in the quarter to $1.15 billion.
The cancer treatment Erbitux, which Lilly markets in the U.S. with New York-based Bristol-Myers Squibb Co., generated sales of $35.6 million after the ImClone acquisition. Bristol- Myers reported on Jan. 27 that Erbitux sales declined 2 percent for the quarter after a study found that the medicine didnt work in patients with a gene mutation.