Eli Lilly and Company has set to achieve earnings projections in 2011 in the range of $3.84 to $3.89. However, for 2012, it expects earnings per share to be in the range of $3.10 to $3.20 on both a reported and non-GAAP basis. The company anticipates 2012 revenue of between $21.8 and $22.8 billion. This includes an expected decline of over $3 billion in Zyprexa sales due to patent expirations in most markets outside of Japan.
The reduction in revenue due to Zyprexa patent expirations is expected to be partially offset by growth in key franchises including Cymbalta, Cialis, Humalog, Humulin and Forteo, as well as continued growth of newer products such as Effient, Axiron and Tradjenta.
The company also anticipates continued strong, double-digit revenue growth from its Elanco Animal Health business. Both Japan and Emerging Markets are expected to post continued strong underlying volume growth; however, overall revenue growth in these markets in 2012 will be adversely affected by anticipated pricing actions in Japan and by the expected impact of patent expirations, including Zyprexa, in some emerging market countries. The company anticipates that gross margin as a percent of revenue will be approximately 77 per cent.
Dr John C Lechleiter, chairman, president and CEO, said, "2012 is an important year for Lilly, having entered the period when we face patent expirations on some of our largest products, most notably Zyprexa late last year and Cymbalta in the US at the end of 2013. We've been preparing to meet these challenges for many years, and have the plans in place to enable us to bridge this period and return to sustainable growth after 2014. We remain focused on executing this plan."
"Our 2012 financial guidance reflects the three key elements of our bridging strategy," continued Lechleiter. "First and foremost, we are replenishing and advancing our pipeline. We've successfully rebuilt our mid- to late-stage pipeline to position Lilly for growth post-2014, with 12 assets now in phase III, exceeding our goal of 10 by the end of 2011. We continue to revamp our discovery efforts to ensure a more sustainable flow of innovation for the long-term. Second, we're investing to drive growth in the key brands that don't lose patent protection during this period and in our countercyclical growth engines that don't have the same cycle of patent expirations as our U.S. and European pharmaceutical businesses. These include Japan, select emerging markets and our animal health business. Third, we continue to drive productivity gains across our business to fund the R&D necessary to fuel our future growth, recapitalize our physical assets and maintain our dividend at least at its current level."
Derica Rice, Lilly executive vice president, global services and chief financial officer, commented on the company's mid-term financial guidance through 2014. "We remain on track to meet or exceed the mid-term minimum financial performance outlined this past June. From now through 2014, on an annual basis we still expect revenue to be at least $20 billion, net income to be at least $3 billion, and operating cash flow to be at least $4 billion."