Eli Lilly has reported impressive growth in its net earnings during the first quarter ended March 2005 despite slower growth in net sales.
The Indianapolis-based company's net earnings for the period under review went up by 84 per cent to US$ 736.6 million from $400.4 million in the corresponding period of last year. The net sales moved up only by 3.6 per cent to $3497 million from $3377 million in the last period. The significant rise in net earnings pushed its earning per share to $0.68 in the first quarter of 2005 from $0.37.
The company's sales increased only by 3.6 per cent as against the estimated rise of 7 per cent mainly due to restructuring arrangements with its US wholesalers. The new products like Alimta, Cialis, Cymbalta, Forteo, Strattera, Symbyax, Xigiris and Yentreve contributed $503.2 million to first quarter sales and accounted for 14 per cent of total sales. Worldwide sales volume decreased one per cent, while selling prices and exchange rates both increased sales by 2 per cent.
The R&D expenditure increased by 8.6 per cent to $702.2 million and worked out to 20 per cent of net sales. This increase was primarily due to increased clinical trial and development expenses. The operating income increased by 53 per cent to $845.8 million due to increased sales and the first quarter 2004 charge related to the AME acquisition, offset partially by increased cost of sales and R&D expenses including the cost of stock option expenses.
Sidney Taurel, chairman, president and CEO of the company said, "We are pleased with our financial performance in the first quarter. Furthermore, we expect acceleration of sales and earnings growth in the second half of this year driven by our newer products. Notably, we are encouraged by Cymbalta's steady market share gains despite a challenging antidepressant category and by Alimta's rapid uptake in the treatment of second line non-small cell lung cancer."
We are also enthusiastic about our next major pipeline milestones. First, exenatide, a potential treatment for type-2 diabetes, has its FDA action date at the end of the month. In addition, if our registration studies are successful, Lilly anticipates making a US submission in the second half of this year for Arxxant, formerly known as ruboxistaurin, for symptoms related to nerve damage caused by diabetes, Taurel added.
Recently, the US District Court for the Southern District of Indiana upheld Lilly's 2011 patent on Zyprexa. The Court ruled in favor of Lilly on all accounts, including the patent doctrines of obviousness, double patenting, inequitable conduct, novelty, and public use.