Eli Lilly yesterday unveiled a 19% drop in second quarter profits, but actually beat analysts’ expectations, and raised its full year 2007 sales and earnings forecast on burgeoning revenues from newer drugs.

Net income fell to $663.6 million, or 61 cents a share, from $822 million, or 76 cents, a year earlier. However, sales surged 20% to $4.6 billion, helped in the main by the antidepressant Cymbalta (duloxetine) and the erectile dysfunction drug Cialis (tadalafil). Lilly snapped up former partner ICOS in January for $2.3 billion, so this represented the first full quarter in which Lilly received all the revenue from Cialis, which rose 26% to $293 million. Cymbalta's sales, meanwhile, jumped 67% to $519.5 million.

But its biggest drug is still the antipsychotic Zyprexa (olanzapine), which jumped 9% to $1.2 billion, despite a link to weight gain and diabetes, but helped by new indications and a price rise.

Strong growth drivers in new products

Other strong growth products included the diabetes drug Byetta (exenatide), which escalated 54% to $152 million, while sales of the fast-acting insulin Humalog rose 12% to $358 million and the anticancer agent Gemzar (gemcitabine) hurtled forwards 15% to $396 million.

Aside from the ICOS buy, Lilly has also had to absorb costs from the purchase of insomnia drug manufacturer Hypnion in March and the addition of veterinary medicine firm Ivy Animal Health two months later.

On the back of these results, Lilly has raised its adjusted earnings forecast by more than 3% to $3.40 to $3.50 a share. Reported EPS are expected to be in the range of $2.75-$2.85, representing growth of 12%-16% for the full year.