Eli Lilly 3rd-Qtr Profit Rises 30% on Prozac, Zyprexa (Update6)
[this update's got more information]
Bloomberg News
October 21, 1998, 1:47 p.m. PT
Eli Lilly 3rd-Qtr Profit Rises 30% on Prozac, Zyprexa (Update6)
Indianapolis, Oct. 21 (Bloomberg) -- Eli Lilly & Co. said
third-quarter profit rose 30 percent on increased sales of its
schizophrenia drug Zyprexa and its antidepressant Prozac.
Profit before a charge for the world's 10th-largest
drugmaker rose to $595 million, or 53 cents a share, from net
income of $456.9 million, or 40 cents, a year earlier. Sales rose
19 percent to $2.57 billion from $2.16 billion.
Lilly intends to build up its new drugs, such as two-year-
old Zyprexa, to offset the expiration of the patent on Prozac,
the world's best-selling antidepressant, early in the next
decade. Lilly increased its own research spending in the third
quarter. It also has pacts with other drugmakers to work on
improved versions of rivals' existing pills for diabetes and
impotence.
''Lilly's always been a strong research house and they're
becoming more open to these alliances,'' said Jack Lafferty, an
analyst with U.S. Trust Co., which holds about 3 million Lilly
shares, according to regulatory filings. ''That they can post
these kinds of earnings numbers while they spend more on research
is very hopeful for the future.''
Lilly shares rose 2 5/8 to 78. Lilly could have 1998 per-
share earnings of $1.93 to $1.94 and 1999 per-share earnings of
$2.25 to $2.30, said Charles Golden, the company's chief
financial officer.
Lilly had been expected to earn $1.93 a share in 1998 and
$2.28 a share in 1999, the average estimates of analysts polled
by First Call Corp. Golden said the company was not guiding
analysts to a higher estimate of $1.95 a share for 1998 profit.
Icos Collaboration
A charge of $76.8 million, or 7 cents a share, for a payment
to Icos Corp. for their impotence-pill collaboration, resulted in
net income of $518.2 million, or 46 cents.
Icos, partly owned by Microsoft Corp. Chairman Bill Gates,
is testing an impotence drug intended to have fewer side effects
than Pfizer Inc.'s Viagra. Introduced in April, Viagra already
has more than $500 million in sales.
The Icos drug is in the second of three phases of testing
needed to apply for U.S. Food and Drug Administration approval.
Icos could release data next year about how well the drug works.
Lilly also is looking to its own laboratories to find new
drugs. Research and development spending rose to $441.6 million
from $345.4 million a year earlier.
Analysts have said the company has several good prospects in
development, including an agreement to help develop and market a
diabetes drug from Japan's Takeda Chemical Industries. The drug
could be a potential rival to Warner-Lambert Co.'s Rezulin.
Rezulin, introduced in 1997, had $181 million in third-quarter
sales.
Marketing Spending
Lilly also increased spending on marketing and
administrative expenses by 16 percent to $680.5 million. The
increase helped it raise sales of its older products, such as its
top-seller, Prozac, as well.
Third-quarter sales of the almost 11-year-old Prozac rose 12
percent to $793 million with increased marketing and advertising.
Lilly began advertising the drug in popular magazines, such as
Time, in July 1997.
Sales of Evista, introduced in January, were $33.2 million.
The drug is used to prevent thinning of bones, a condition known
as osteoporosis, which largely affect older women. In the second
quarter, it had $15 million in sales and $33 million in the first
quarter. In the third quarter, Lilly won approval to sell Evista
in the European Union, whose 15 members include France and
Germany. Lilly also is testing whether the drug can work to
prevent breast cancer and heart disease.
Sales of Lilly's Zyprexa, introduced in late 1996, almost
doubled to $396 million. Doctors prefer Zyprexa and a similar
schizophrenia drug, Johnson & Johnson's Risperdal, over older
generic drugs that can leave patients with permanent side
effects, such as uncontrollable movements of the face and limbs.
Gemzar sales rose 46 percent to $69 million. In the third
quarter, the U.S. Food and Drug Administration approved Gemzar
for use in a kind of lung cancer. The drug already was used for
pancreatic cancer.
Sales of ReoPro, a clot preventer made by Centocor Inc. and
marketed by Lilly, rose 37 percent to $86.7 million.
Lilly said its effective tax rate for 1998 fell to about 23
percent in the third quarter from 25 percent.
--Kerry Dooley in the Princeton newsroom (609) 279-4000 |
