Eli Lilly and Company has suffered a setback during the fourth quarter ended December 2012 and its net profit declined by 3.6 per cent to $827 million from $858 million in the corresponding period of last year mainly due expiration of patient for Zyprexa. Its revenues also moved down by 1.5 per cent to $5,957 million from $6,047 million. Zyprexa sales declined sharply by 49 per cent to $385 million from $750 million in the last period.
John C Lechleiter, chairman, president and CEO, said, “Lilly delivered solid financial results in the fourth quarter of 2012, as we successfully offset a large part of the revenue decline from the Zyprexa patent expiration with growth in other products such as Cymbalta, Forteo, Alimta, Effient and our animal health portfolio. At the same time, we continued to control costs while investing in R&D in order to replenish and advance our pipeline. Today, Lilly has 13 potential new medicines in phase III testing. We are well-positioned to deliver on our innovation-based strategy and create long-term value for all of our stakeholders.”
The company's US revenue declined by 2 per cent to $3,230 million and its sales outside the US decreased by one per cent to $2,728 million, driven by the loss of patent exclusivity for Zyprexa n markets outside of Japan, the unfavorable effect of foreign exchange rates, and decreased prices,partially offset by increased volume in certain other products. Its R&D expenditure increased by 8 per cent to $1,463 million, or 25 per cent of total revenue, driven by expenses related to late-stage clinical trials. R&D expenditure includes a $50 million milestone payment to Incyte Corporation based on the formal initiation of the rheumatoid arthritis phase III program for baricitinib.
For the full year ended December 2012, Eli Lilly's revenues declined by 7 per cent to $22,603 million from 24,287 million in the previous year. Its net profit declined by 6 per cent to $4,089 million from $4,348 million. EPS worked out to $3.66 as against $3.90 in the last year. Its R&D expenditure went up by 5 per cent to $5,278 million from $5,021 million. The effective tax rate was 24.4 per cent in 2012, compared with 18.7 per cent in 2011. The sales of Zyprexa declined by 63 per cent to $1,701 million from $4,622 million in the previous year. However, the sales of Cymbalta increased by 20 per cent to $4,994 million and that of Alimta up by 5 per cent to $2,594 million.
The company anticipates 2013 revenue of between $22.6 billion. Despite the initial impact of the US Cymbalta patent expiration in the fourth quarter of 2013 and the loss of the anticipated 15 per cent revenue sharing obligation on worldwide exenatide sales, the company expects overall revenue growth. In addition, significant revenue growth is expected in Japan and the emerging markets, particularly China. The gross margin as percent of revenue will be around 78 per cent.