Eli Lilly has turned in a profit for the first quarter of the year, as cost-cutting measures helped offset a greater investment in R&D.
The US drug giant posted operating income of $1.422 billion (reported), marking a rise of 3% over the year-ago quarter, as strict cost saving strategies helped shave marketing, selling and administrative expenses, which offset higher R&D expenses.
Worldwide revenues remained flat at $5.6 billion, as a four percentage point increase because of higher prices was pulled back down by a 3% drop from lower volume and a 1% hit from currently exchange effects.
The drop in volume was primarily driven by the loss of patent exclusivity for its veteran antipsychotic Zyprexa (olanzapine) in most major markets, the company said, which was partially offset by volume gains for certain other products.
Total US revenues inched up 2% to $3.1 billion, while those outside the country slipped 2% to $2.5 billion.
Market entry of Zyprexa copycats drove its revenues down 49% to $284.8 million, and sales of osteoporosis drug Evista (raloxifene) also slipped 6% to $240.6 million, as flat US revenues were dragged down by an 18% drop in other markets because of lower volume and, to a lesser extent, the unfavourable impact of foreign exchange rates and lower prices.
On the plus side, turnover of antidepressant/fibromyalgia blockbuster Cymbalta (duloxetine) leapt 10% to $1.3 billion, driven by higher prices and demand in the US, and increasing demand elsewhere, although this was muted a little by price decreases some markets.
Amongst those on the rise were: the erectile dysfunction drug Cialis (tadalafil), which rose 11% to $515 million; the insulin product Humalog, up 7% to $632.7 million; and attention-deficit hyperactivity disorder drug Strattera (atomoxetine), growing 5% to $166.7 million.
"Lilly delivered solid financial results in the first quarter of 2013 despite numerous headwinds, as growth in several key products and regions offset the post-patent decline in Zyprexa, a weaker Japanese yen and a slowdown in parts of our animal health business," commented John Lechleiter, company chairman, president and chief executive. "Most importantly, we have remained focused on advancing our late-stage pipeline, and are pleased to announce that we have received Fast Track designation from the FDA and have initiated a rolling submission for ramucirumab," he added.
The company said it still anticipates 2013 revenues of between $22.6 billion and $23.4 billion.
Despite the initial impact of the Cymbalta's US patent expiry in the fourth quarter of this year, and the loss of the anticipated 15% revenue sharing obligation on worldwide exenatide sales, Lilly still expects overall revenue growth, it noted.