Eli Lilly and Company has achieved impressive growth in profitability during the second quarter ended June 2008. Its net profit improved sharply by 44 per cent to $959million from $664 million in the corresponding period of last year. Its net sales increased by 11 per cent to $5,150 million from $4,631 million. With smart improvement in profitability, its earnings per share improved to $0.88 from $0.61 in the last period.

The company's full-year 2008 reported earnings guidance is now $3.79 to $3.94 per share. The change from earlier guidance of $3.90 to $4.05 per share results from the previously mentioned second-quarter 2008 significant items totalling $11 per share that are reflected in our financial results. The company's full-year 2008 earnings per share guidance does not reflect potential charges related to the acquisition of SGX Pharmaceuticals.

Gross margin of sales has decreased by 1.7 percent to 76.7 percent. This decrease was primarily due to the impact of foreign exchange rates and the inclusion in cost of sales of asset impairments at certain manufacturing facilities of $57.1 million in the second quarter of 2008, offset in part by manufacturing expenses growing at a slower rate than sales. Without the asset impairments, gross margin as a percent of sales would have decreased by 0.6 percentage points to 77.8 per cent.

In the second quarter of 2008, Zyprexa sales totalled $1.240 billion, a 2 per cent increase compared with the second quarter of 2007. US sales of Zyprexa were essentially flat at $563.6 million. Cymbalta generated $654.4 million in sales, an increase of 26 per cent compared with the second quarter of 2007. US sales of Cymbalta increased 19 per cent, to $542.8 million. Gemzar sales totalled $440.1 million in the second quarter of 2008, an increase of 11 per cent from the second quarter of 2007. Sales in the US increased 11 per cent, to $183.3 million.

For the first six months of 2008, worldwide reported and proforma sales increased 12 per cent, to $9.958 million, compared with sales for the same period in 2007. Reported net income and earnings per share were $2.023 billion and $1.85, respectively.

The company's full-year 2008 reported earnings guidance is now $3.79 to $3.94 per share. The change from earlier guidance of $3.90 to $4.05 per share results from the previously mentioned second-quarter 2008 significant items totalling $.11 per share that are reflected in our financial results. The company's full-year 2008 earnings per share guidance does not reflect potential charges related to the acquisition of SGX Pharmaceuticals.