Eli Lilly and Co. (LLY.N: Quote, Profile, Research) on Tuesday posted better-than-expected quarterly earnings and raised its 2007 forecast, helped by surging sales of its prescription drugs, including depression treatment Cymbalta.
Lilly posted strong revenue gains from Cymbalta and Zyprexa for schizophrenia, which rose 67 percent and 9 percent, respectively, and helped the company beat revenue expectations by about $250 million.
"Together these two products accounted for almost two thirds of the revenue beat," JPMorgan analyst Roberto Cuca wrote in a research note. "This should boost sentiment among those investors who had been concerned about the health of Lilly's (central nervous system) franchise."
The second-quarter results also signaled Lilly's acquisition of Icos in January is paying off, accounting for about a third of the 20 percent jump in quarterly sales to $4.63 billion. Through that deal, Lilly gained full ownership of the widely used Cialis impotence pill, which posted a 26 percent rise in sales to $293 billion.
Lilly shares rose 2 percent in opening trade.
Excluding charges related to acquisitions of Hypnion Inc. and Ivy Animal Health in the period, Lilly earned 90 cents per share, which was 8 cents better than analysts had expected, according to Reuters Estimates.
On a net basis after those charges, the Indianapolis-based drug maker earned $664 million, or 61 cents per share, from $822 million, or 76 cents per share, a year earlier.
Lilly forecast 2007 earnings per share, excluding special items, of $3.40 to $3.50 per share, up from its previous forecast of $3.29 to $3.39 per share. It expects sales to grow in the "mid-teens" percentage range.
Cymbalta's revenue rise to $520 million in the second quarter was helped by its new use against generalized anxiety disorder approved by U.S. regulators in February.
Meanwhile Zyprexa, the company's biggest product, rebounded with a 9 percent rise to $1.21 billion after earlier sales declines prompted by concerns over its tendency to cause weight gains.
Lilly said higher overseas sales of Zyprexa, along with higher U.S. prices, outstripped lower U.S. demand for the medicine. The company projected "modest" worldwide sales growth of Zyprexa for the full year.
Gemzar, used to treat lung and pancreatic cancer, grew 15 percent to $396 million, while lung cancer treatment Alimta jumped 35 percent to $207 million.
Sales of Strattera, used to treat attention deficit hyperactivity disorder, slipped one percent to $142 million, amid concerns that such drugs pose heart risks and cause psychiatric problems, such as hallucinations.
Eli Lilly shares rose $1.12 to $58.29 in opening trade on the New York Stock Exchange. They are up 12 percent in 2007, outpacing a 2 percent rise for the American Stock Exchange Pharmaceutical index.
source:forbes.com
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