Eli Lilly’s profits fell by a hefty 39% in the first quarter of 2007 on the back of restructuring and acquisition charges, despite recording higher sales of its prescription medicines.

The company’s earnings fell to $508.7 million, or $0.47 per share, from $835 million, or $0.77 a share, a year earlier. These figures were hurt by a restructuring charge of $0.08 per share and a charge of $0.29 a share resulting from Lilly’s $2.3-billion purchase of ICOS Corp.

Excluding these charges, profit was higher than the $0.79 that analysts had forecast, reaching $0.84 a share.

Sales up 14%

Revenue in the quarter increased to $4.23 billion, boosted by a jump in sales of 14%. This growth was fuelled by strong sales of the company’s depression drug Cymbalta (duloxetine) and cancer treatments Gemzar (gemcitabine) and Alimta (pemetrexed), as well as consistent growth for its schizophrenia drug Zyprexa (olanzapine). Results also benefited from an average 5% rise in prices.

Lilly purchased ICOS in January in order to gain full ownership of the world’s second-biggest selling impotence drug, Cialis (tadalafil), which the two companies had jointly owned. In the same month, Lilly also paid OSI Pharmaceuticals $385 million for exclusive licensing rights to its experimental diabetes medication.