Eli Lilly has posted a hefty loss for the second quarter after taking a massive charge in connection with a product liability settlement involving its blockbuster antipsychotic Zyprexa (olanzapine).
The loss was $252 million, or $0.23 per share, compared with earnings of $657 million, or $0.60 per share for the same period last year [[23/07/04c]]. Lilly noted that it took a charge of $1.1 billion during the quarter, $690 million of which is part of a settlement the company reached with lawyers representing some 7,000 affected users of Zyprexa who sued Lilly alleging the drug increased their risk of diabetes or related diseases [[10/06/05b]], claims that the firm denies. Excluding the settlement and related charges, net income would have been $728 million, or $0.67 per share, in line with analysts forecast.
Revenues for the quarter were up 3% to $3.7 billion and Zyprexa sales continued to decline, down 10% to just under $1.1 billion and down 21% in the USA due to “continuing competitive pressures”. Also disappointing was turnover from attention-deficit hyperactivity disorder Strattera (atomoxetine), which recently received a side-effects warning from the US Food and Drug Administration [[01/07/05a]], and only contributed $124 million to Lilly’s coffers, a fall of 31%.
On a brighter note, the company’s newer products performed well, notably the osteoporosis drug Forteo (teriparatide) which leapt 56% to $102 million and the anticancer agent Alimta (pemetrexed), up to $111 million from $94 million in the first quarter. Lilly’s new antidepressant Cymbalta (duloxetine) had sales of $161 million, up 51%, while total turnover for the erectile dysfunction drug Cialis (tadalafil), sold with Icos Corp, rose 39 % to $191 million.
Chief executive Sidney Taurel said he was pleased with the results, noting that with the recent launch [[03/05/05d]] of the diabetes drug Byetta (exenatide), “we have now brought nine first-in-class or best-in-class medicines to the market over the past three-and-a-half years.” He added that “we are also encouraged by US Zyprexa prescription volume trends and are pleased that our interventions have started to achieve a key objective of slowing the sequential erosion of sales.”