Eli Lilly & Co has suffered set back during the first quarter ended March 2011 and its net profit declined by 15 per cent to US$ 1,056 million from $1,248 million in the corresponding period of last year. Its revenues grew by 6 per cent to $5.8 billion, driven by increased demand in international markets. It delivered first quarter earnings per share of $.95 (reported), or $1.24 (non-GAAP). The decreases in net income and earnings per share were primarily driven by lower operating income due to the restructuring and in-process research and development charges, partially offset by improved gross margin and a lower effective tax rate.
Total revenue in the US increased by one percent to $3.076 billion primarily due to higher prices, partially offset by lower volume. Total revenue outside the US increased 13 per cent to $2.763 billion due to increased volume and, to a lesser extent, the positive impact of foreign exchange rates, partially offset by lower prices. First-quarter 2011 total revenue was reduced by approximately $90 million due to the impact of US health care reform. Compared with the first quarter of 2010, research and development expenses grew 8 per cent due primarily to increased late-stage clinical trial costs. Research and development expenses were $1.124 billion, or 19.2 per cent of total revenue.
"Lilly started the year by delivering solid financial results as we continue to advance the next wave of potential new medicines in our pipeline," said John C. Lechleiter, chairman, president and chief executive officer. "Growth in international markets and the strong performance of Cymbalta, Alimta and our animal health business drove volume-based revenue growth of six per cent, despite a significant decline in Gemzar sales due to generic competition. This revenue growth allowed us to make necessary investments in research and development to address the challenges of upcoming patent expirations. We are on track to deliver on our 2011 headcount and expense reduction targets, as well as our goal of having at least ten potential new medicines in phase 3 clinical development by the end of this year."
During the quarter under review, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) issued a positive opinion recommending approval of exenatide 2 mg powder and solvent for prolonged release suspension for injection (proposed trade name Bydureon) in the European Union for the treatment of type 2 diabetes in combination with certain oral therapies. The CHMP's positive opinion is now referred for final action by the European Commission, which has the authority to approve medicines for the European Union. The Commission usually makes a decision on CHMP recommendations within two to three months.
Late last week, the company received a complete response letter from the US Food and Drug Administration (FDA) for its New Drug Application (NDA) for liprotamase, a non-porcine pancreatic enzyme replacement therapy (PERT), under investigation for the treatment of exocrine pancreatic insufficiency (EPI). The complete response letter communicated the need for Lilly to conduct an additional clinical trial prior to a re-submission. The company will be working diligently to address the agency's questions.
The company announced that Axiron (testosterone) topical solution is available in pharmacies throughout the US. It received a complete response letter from the FDA for the NDA for Amyvid (florbetapir F 18 injection), a Positron Emission Tomography (PET) imaging agent under investigation for the detection of beta-amyloid plaque in the brains of living patients. The company is working to address the FDA's questions.
The company made an irrevocable, unconditional offer to acquire the animal health business of Janssen Pharmaceutica NV, a Johnson & Johnson company. The two companies have notified the appropriate European works councils of their intentions. Upon deal closing, Lilly's animal health division, Elanco, would obtain a portfolio of about 50 marketed animal health products.