Eli Lilly & Co has suffered heavy setback during the fourth quarter ended December 2014 and its net profit declined sharply by 41.1 per cent to $429 million from $728 million in the corresponding period of last year despite lower R&D expenditure, patent expirations for Cymbalta and Evista. Its revenues declined by 11.8 per cent to $5,121 million from $5,809 million. With sharp fall in profits, EPS dwindled to $0.40 from $0.67 in the last period.
Its US revenues declined by 19 per cent to $2,453 million. Total revenue outside the US decreased by 3 per cent to $2,669 million.
Dr John C Lechleiter, chairman, president and CEO, said, “While Lilly's fourth-quarter 2014 results continue to reflect the impact of patent expirations, we are moving to a period of growth led by diabetes, oncology and animal health. Despite the loss of significant revenue for Cymbalta and Evista following the expiration of our US patents, we saw strong performance from many other products. At the same time, we made excellent progress with our innovation-based strategy, and we continue to advance our pipeline. Throughout the balance of this decade, we aim to drive revenue growth and expand margins as we offer new medicines to the people who need them.”
During the quarter ended December 2014, Eli Lilly received US FDA approval for Cyramza in combination with docetaxel and Cyramza in combination with paclitaxel. Further, the European Commissin approved and the company launched Cyramza in combination with paclitaxel for the treatment of advanced gastric or GEJ adenocarinoma. The company announced an oncology clinical trial collaboration with Merck to evaluate the safety, tolerability and preliminary efficacy of Keytruda, Merck's anti-PD-1 therapy, in combination with Lilly's pemetrexed (Alimta, ramucirumab and necitumumab in multiple clinical trials.
For the full year ended December 2014, Eli Lilly's revenues declined by 15.1 per cent to $19,616 million from $23,113 million and its net profit declined sharply by 48.9 per cent to $2,391 million from $4,685 million. EPS moved down to $2.23 from $4.32 in the previous year. Its US revenues declined by 29 per cent to $9,134 million due to lower demand for Cymbalta and Evista following patent expirations as well as wholesaler buying patterns. However, its international revenues increased by 3 per cent to $10,482 million due to higher volume. R&D expenditure declined by 14 per cent to $4,734 billion due to lower late-stage clinical development costs.
The sales of Cymbalta declined by 68 per cent to $1,615 million during the year 2014 from $5,084 million and that of Zyprexa moved down by 13 per cent to $1,037 million from $1,195 million in the previous year. Evista sales lost by 60 per cent to $420 million from $1,050 million. However, sales of Alimta, Humalog Cialis, Forteo and Humulin increased during 2014. Worldwide animal health sales increased by 9 per cent to $2,347 million.
The company completed acquisition of Novartis Animal Health business on January 1, 2015 in an all cash transaction of app. $5.4 billion. As part of the approval, certain animal health assets in the US relating to the Sentinel canine parasiticide franchise were divested to Vribac for approximately $410 million.
The company has revised certain elements of its 2015 financial guidance solely to reflect the recent strengthening of the US dollar compared with several other currencies. It anticipates 2015 revenues between $19.5 billion and $20 billion. The acquisition of Novartis Animal Health is expected to add significant revenues.