Expired Patents Take a Bite out of Eli Lilly Results

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By Trey Thoelcke Published
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Eli Lilly & Co. (NYSE: LLY) reported first-quarter 2014 results before markets opened Thursday. The pharmaceutical giant posted adjusted diluted earnings per share (EPS) of $0.68 on revenues of $4.68 billion. In the same period a year ago, the company reported adjusted EPS of $1.14 on revenues of $5.60 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.71 and $4.80 billion in revenues.

Strong volume growth outside the United States, particularly in Japan and the emerging markets, was not enough to offset the impact of U.S. patent expirations for Cymbalta and Evista.

The company’s CEO said:

Lilly’s first-quarter results reflect the substantial decline in revenue and earnings that we expected to encounter as a result of the recent U.S. patent expirations for Cymbalta and Evista. … Beyond our financial performance, the initial months of 2014 have included a series of key regulatory actions, pipeline announcements and business development transactions that solidify the company’s future growth prospects, highlighted by the approval of Cyramza in the U.S. and the announced acquisition of Novartis Animal Health.

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The company revised its EPS guidance for 2014 to aa range of $2.70 to $2.78, as well as for revenue of between $19.4 billion and $20.0 billion. The consensus estimate for 2013 calls for EPS of $2.81 on revenues of $19.88 billion. For the second quarter, analysts estimate EPS at $0.66 on $4.88 billion in revenue.

Analysts see the company’s Ramucirumab sales going to $200 million in 2015 and $2 billion in 2020. Analysts also like the share buybacks.

Eli Lilly shares were up fractionally in premarket trading Thursday, at $59.67 in a 52-week range of $47.53 to $61.15. Note that Thomson Reuters had a consensus analyst price target of around $59.82 before this report.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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