Bloomberg: Eli Lilly 3rd-Qtr Profit Rises 30% on Prozac, Zyprexa (Update4)
Bloomberg News
October 21, 1998, 12:06 p.m. ET
Eli Lilly 3rd-Qtr Profit Rises 30% on Prozac, Zyprexa (Update4)
(Adds background on Icos, Evista; updates stock activity.)
Indianapolis, Oct. 21 (Bloomberg) -- Eli Lilly & Co. said
third-quarter profit rose 30 percent as more doctors prescribed
its schizophrenia drug Zyprexa and an advertising campaign
boosted sales of its top seller, the 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 2-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.
''They could have reported even better earnings than this,''
said Jeffrey Kraws, an analyst with Everen Securities, who has an
''outperform'' rating on Lilly. ''They're spending for the future
and still attaining these results.''
Lilly shares rose 2 1/4 to 77 5/8 in midday trading.
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. Viagra, introduced in April, 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 |
