Eli Lilly & Company LLY reported first-quarter 2015 adjusted earnings per share of 87 cents, well above the Zacks Consensus Estimate of 76 cents per share and 18% above the year-ago earnings.
First-quarter revenues slipped 1% to $4.645 billion, reflecting generic competition for Cymbalta and Evista in the U.S. as well as negative currency movement. However, revenues were slightly above the Zacks Consensus Estimate of $4.625 billion.
Reported earnings (including special items) declined 26% to 50 cents per share in the first quarter of 2015.
Generics & Currency Hit Revenues
First-quarter revenues reflected a 6% negative impact due to currency fluctuation. This was partially offset by higher prices (3%) and higher volume (3%). The higher volume reflected the inclusion of revenue from Novartis Animal Health, wholesaler buying patterns in the U.S., and increased volumes for several other products including Cyramza and Humalog. This was partially offset by the impact of the Dec 2013 genericization of Cymbalta in the U.S. and the Mar 2014 patent expiry of Evista in the U.S.
U.S. revenues grew 2% to $2.197 billion reflecting higher volume for Cyramza, higher prices, wholesaler buying patterns and the inclusion of the Novartis Animal Health business. This was partially offset by the loss of patent protection on Cymbalta and Evista. Ex-U.S. revenues declined 12% to $2.447 billion mainly due to unfavorable currency movement.
During the first quarter, Zyprexa recorded a 22% decline in revenues, which came in at $219.5 million.
Cymbalta sales fell 40% to $287 million. U.S. sales plunged 69% to $54.4 million due to the loss of patent exclusivity in Dec 2013. Ex-U.S. sales fell 23% to $232.6 million reflecting lower volume and prices due to genericization as well as unfavorable currency movement.
Evista sales fell 55% to $66.8 million. U.S. sales dropped 75% to $24.4 million, due to the loss of exclusivity in Mar 2014. Ex-U.S. sales declined 18% to $42.6 million due to lower volume and unfavorable currency movement.
Humulin sales remained flat at $315.7 million.
Products which recorded growth in the first quarter included Effient (up 2% to $121.8 million), Strattera (up 13% to $173.7 million), Cialis (up 1% to $538.3 million), Humalog (up 5% to $684 million), and Trajenta (up 7% to $82.3 million).
Cyramza sales were $67.5 million during the quarter.
Eli Lilly's Animal Health segment contributed $749.8 million (up 42%) to revenues benefiting from the Novartis Animal Health business acquisition.
Meanwhile, products like Alimta (down 9% to $573 million) and Forteo (down 2% to $293 million) were affected by negative currency movement.
Guidance Maintained
Eli Lilly maintained its 2015 guidance of earnings of $3.10 – $3.20 per share on revenues of $19.5 billion – $20.0 billion.
The Zacks Consensus Estimate for earnings and revenues is currently $3.15 per share and $19.8 billion, respectively.
The company expects gross margin of about 78%.
Marketing, selling and administrative expenses and research and development expenses guidance remain unchanged at $6.3 billion – $6.6 billion and $4.7 billion – $4.9 billion, respectively.
Our Take
Although Eli Lilly's first-quarter earnings were well above expectations, the genericization of Cymbalta and Evista and negative currency movement impacted revenues. However, some of the company's key products and the animal health business should help offset the impact of genericization. The company also has some new products in its portfolio which should start contributing to revenues. Eli Lilly is also working on controlling costs and is slated to return to growth from 2015.
Eli Lilly is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Biogen BIIB, AVEO Pharmaceuticals, Inc. AVEO and Agenus, Inc. AGEN. All three are Zacks Rank #1 (Strong Buy) stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment