Skip to content

LLY · ELI LILLY & Co

31 filings

10-K

LLY 10-K Annual Reports

ELI LILLY & Co - 31 annual reports

Filing record · 2016–202610-K1110-Q328-K110

2025
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2025
Eli Lilly and Company reported robust financial performance for the fiscal year 2025, driven by significant revenue growth, primarily from its cardiometabolic products, Mounjaro and Zepbound. Total revenue reached $65.18 billion, a 45% increase year-over-year, with net income soaring by 95% to $20.64 billion. This strong performance underscores the market's demand for Lilly's innovative treatments, particularly in the areas of diabetes and obesity. The company continues to invest heavily in research and development, with a substantial pipeline including promising candidates in neuroscience and oncology. However, investors should note the increasing impact of governmental pricing regulations, such as the Inflation Reduction Act, which will influence future revenue streams for key products like Jardiance, Trulicity, and Verzenio. While the company is expanding its manufacturing capacity to meet demand, potential supply chain disruptions and evolving international trade policies remain areas to monitor.
Feb 12, 2026
2024
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2024
Eli Lilly and Company (LLY) reported a substantial increase in revenue for the fiscal year ending December 31, 2024, with total revenue reaching $45.04 billion, a 32% increase over the prior year. This growth was primarily driven by strong performance in key products like Mounjaro and Zepbound, which saw significant revenue gains, along with continued growth from Verzenio and Taltz. The company also experienced substantial net income growth of 102%, reaching $10.59 billion, with diluted earnings per share rising to $11.71. This financial performance reflects increased volume and higher realized prices across its portfolio, particularly in the U.S. market. Lilly continues to aggressively invest in its research and development pipeline, with approximately 55 new medicine candidates in clinical development or under regulatory review. Significant progress has been made in areas such as obesity and Alzheimer's disease, with Mounjaro/Zepbound and Donanemab (Kisunla) showing promising results and regulatory approvals. The company also announced a new $15 billion share repurchase program, demonstrating confidence in its future prospects and commitment to returning capital to shareholders. However, investors should note ongoing risks related to pricing pressures, regulatory changes (such as the Inflation Reduction Act), intellectual property challenges, and potential supply chain disruptions.
Feb 19, 2025
2023
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2023
Eli Lilly and Company (LLY) reported strong performance in its 2023 10-K filing, driven by significant growth in key therapeutic areas, particularly diabetes, obesity, and oncology. Revenue increased by 20% year-over-year, with notable contributions from Mounjaro, Verzenio, and Jardiance. The company is heavily investing in its late-stage pipeline, with approximately 50 new medicine candidates in clinical development or under regulatory review, including promising treatments for Alzheimer's disease (Donanemab) and obesity. This robust pipeline, coupled with strategic acquisitions like POINT Biopharma for radiopharmaceutical capabilities, positions Lilly for continued innovation and market leadership. However, the company faces ongoing challenges including intense competition, increasing government price controls (like those from the Inflation Reduction Act), and supply chain complexities for high-demand products like Mounjaro and Trulicity. Despite these headwinds, Lilly's strategic focus on innovation and expansion of manufacturing capacity provides a foundation for future growth, though investors should monitor regulatory developments and competitive pressures.
Feb 21, 2024
2022
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2022
Eli Lilly and Company (LLY) reported strong performance in its 2022 10-K filing, with total revenue reaching $28.54 billion, a slight increase from the previous year, driven by volume growth in key products like Trulicity, Verzenio, Jardiance, and Taltz. The company's profitability also saw a notable increase, with net income rising 12% to $6.24 billion. This growth was underpinned by robust clinical development progress, particularly in areas like diabetes with Mounjaro and cardiovascular disease. Despite facing patent expirations for some older products like Alimta, which led to significant revenue declines in those segments, Lilly demonstrated resilience through its strong pipeline and successful launches of newer, high-growth products. The company is heavily investing in research and development, with R&D expenses increasing to $7.19 billion, reflecting its commitment to innovation in therapeutic areas such as obesity, immunology, neuroscience, and oncology. Lilly is also strategically expanding its manufacturing capabilities to meet strong demand for its incretin products. While the company faces ongoing challenges from generic competition, pricing pressures, and evolving regulatory landscapes (including the Inflation Reduction Act), its strategic focus on innovation, pipeline development, and operational efficiency positions it for continued growth and value creation for shareholders.
Feb 22, 2023
2021
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2021
Eli Lilly and Company (LLY) reported strong revenue growth in 2021, driven primarily by increased sales volumes across key therapeutic areas like diabetes and immunology, alongside contributions from COVID-19 therapies. Despite a notable increase in operating expenses, particularly in research and development for late-stage assets, the company's gross margin remained robust. However, net income and earnings per share (EPS) saw a decline compared to 2020, largely due to significant charges, including an inventory impairment for COVID-19 antibodies and debt extinguishment costs, which offset the revenue gains. The company's pipeline remains a key focus, with approximately 45 new medicine candidates in clinical development or under regulatory review across diabetes, immunology, neuroscience, and oncology. Key late-stage developments include submissions for Tirzepatide for type 2 diabetes and Donanemab for Alzheimer's disease. Investors should note the ongoing patent expirations for established products like Alimta and Forteo, which are expected to lead to revenue erosion due to generic competition, particularly in the U.S. for Alimta in 2022. Lilly is actively managing its capital structure, with significant investments planned for new manufacturing facilities and ongoing share repurchases.
Feb 23, 2022
2020
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2020
Eli Lilly and Company reported robust revenue growth of 10% in 2020, reaching $24.5 billion, driven primarily by strong volume increases in key products like Trulicity, Taltz, and Verzenio, as well as contributions from its COVID-19 therapies. Despite a decrease in gross margin percentage due to pricing pressures and increased rebates, the company saw a significant 34% increase in net income from continuing operations to $6.2 billion. Key to this performance were strategic acquisitions, including Dermira and Loxo Oncology, bolstering its late-stage pipeline in areas like immunology and oncology. The company also highlighted significant investments in R&D, particularly for COVID-19 treatments, and provided forward-looking guidance for 2021 expecting continued revenue growth and earnings per share. Lilly's strong market position and diverse product portfolio, coupled with ongoing pipeline development, position it for continued growth, although it remains subject to risks related to patent expirations, pricing pressures, and regulatory changes. The company's financial health appears solid, with a substantial increase in cash and cash equivalents and positive cash flow from operations. Lilly also continues to return value to shareholders through dividends and share repurchases. However, investors should remain aware of the potential impact of patent expiries on products like Alimta and the ongoing scrutiny of pharmaceutical pricing by governments and private payers worldwide. The company's forward-looking statements indicate an expectation of continued growth, but also acknowledge the dynamic nature of the pharmaceutical market and the ongoing need for innovation and strategic adaptation.
Feb 17, 2021
2019
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2019
Eli Lilly and Company's 2019 10-K filing highlights a year of significant strategic moves and financial performance, including the substantial gain from the disposition of its remaining stake in Elanco Animal Health. The company reported increased revenue driven by volume growth in key products like Trulicity, Taltz, and Jardiance, alongside new product launches such as Baqsimi and Reyvow. Despite these positive developments, Lilly continues to navigate the challenges posed by patent expirations for older products like Forteo and Cialis, which have led to significant revenue erosion due to generic competition. The company's robust R&D pipeline remains a core focus, with significant investments in potential therapies for oncology, diabetes, neurodegeneration, immunology, and pain. The acquisition of Loxo Oncology in early 2019 for $6.9 billion bolstered Lilly's oncology pipeline, notably with selpercatinib. Looking ahead, Lilly announced an agreement to acquire Dermira, Inc. for approximately $1.1 billion, further strengthening its immunology portfolio. The company also provided financial guidance for 2020, anticipating continued revenue growth driven by its newer products.
Feb 19, 2020
2018
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2018
Eli Lilly and Company's 2018 10-K filing highlights a strong year for revenue growth, primarily driven by the strong performance of key products like Trulicity, Taltz, Basaglar, and Jardiance. The company reported a net profit after a net loss in the prior year, bolstered by increased revenue and a lower effective tax rate following the 2017 Tax Act. A significant strategic development was the initial public offering (IPO) of its animal health division, Elanco, with plans for a full divestiture. The company also made substantial investments in research and development and strategic acquisitions, notably ARMO Biosciences, indicating a focus on expanding its pipeline, particularly in immunology and oncology. However, the report also flags ongoing challenges, including patent expirations for key products like Cialis and Forteo, which are expected to lead to revenue declines and increased generic competition. The company also faces scrutiny and potential pricing pressures from governments and private payers regarding drug pricing and access.
Feb 19, 2019
2017
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2017
Eli Lilly & Company's 2017 10-K filing reveals a year marked by significant revenue growth, primarily driven by strong performance in its human pharmaceutical segment, particularly with key products like Trulicity and Jardiance. However, the company also faced substantial charges in 2017, including a large provision for income taxes due to the Tax Cuts and Jobs Act of 2017, and significant asset impairment, restructuring, and other special charges, primarily related to cost-reduction efforts and early retirement programs. These factors resulted in a net loss for the year. Despite the net loss, the company continued its commitment to shareholders through dividends and share repurchases, and is actively managing its late-stage pipeline with new molecular entities under development. Investors should note the company's ongoing efforts to address patent expirations and generic competition for several key products, alongside the strategic review of its Elanco Animal Health segment, which could lead to significant corporate changes.
Feb 20, 2018
2016
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2016
Eli Lilly and Company's 2016 10-K filing highlights a year of revenue growth, primarily driven by strong performance in the U.S. market, with a 14% increase. This growth was supported by key products like Trulicity, Taltz, and Jardiance, alongside the positive impact of acquiring commercialization rights for Erbitux in North America. However, the company faced significant headwinds from the loss of patent exclusivity for several products, including Cymbalta and Zyprexa in key markets, which led to substantial revenue declines for these specific drugs. The company continued its substantial investment in research and development, a core strategy for long-term competitiveness, with R&D expenses reaching $5.24 billion. Lilly also made strategic acquisitions, notably in its Elanco Animal Health division, to diversify its portfolio. A key focus for investors is the ongoing challenge of patent expirations and the company's ability to innovate and bring new products to market to offset these losses. The report also details ongoing patent litigation, product liability claims, and the impact of evolving healthcare regulations and payer pressures.
Feb 21, 2017
2015
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2015
Eli Lilly and Company's 2015 10-K report highlights a year of modest revenue growth, primarily driven by the acquisition of Novartis Animal Health. While overall revenue increased by 2%, the company faced headwinds from foreign currency exchange rates impacting international sales. Key human pharmaceutical products like Humalog and Cialis showed growth, but significant revenue declines were observed for Cymbalta and Evista due to patent expirations. The company continues to invest heavily in research and development, with a substantial pipeline of potential new drugs across various therapeutic areas. The acquisition of Novartis Animal Health significantly bolstered Elanco's offerings and global presence. However, investors should note the ongoing challenges related to patent expirations, generic competition, pricing pressures from payers, and potential regulatory changes, all of which pose risks to future revenue and profitability. Lilly is actively managing its debt and returning capital to shareholders through dividends and share repurchases.
Feb 19, 2016
2014
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2014
Eli Lilly and Company's 2014 10-K filing reveals a challenging year primarily marked by significant revenue decline due to patent expirations for key products like Cymbalta and Evista. This led to a substantial decrease in net income and earnings per share compared to the previous year. Despite these headwinds, the company continued to invest heavily in research and development, focusing on core areas like diabetes and oncology. A major strategic move highlighted is the pending acquisition of Novartis Animal Health, expected to close in early 2015, which aims to significantly bolster Elanco's position in the animal health market. The company is navigating a complex operating environment characterized by intense competition from generic and biosimilar manufacturers, increasing pricing and reimbursement pressures from payers, and ongoing patent challenges. Lilly is actively managing its patent portfolio and investing in a robust late-stage pipeline to offset upcoming patent cliffs. The financial performance in 2014 was also impacted by various charges related to restructuring, asset impairments, and a one-time accelerated expense recognition for the U.S. Branded Prescription Drug Fee.
Feb 19, 2015
2013
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2013
Eli Lilly and Company's 2013 10-K filing reveals a company navigating patent expirations while investing heavily in research and development for future growth. The company reported a 2% increase in worldwide revenue to $23.11 billion, driven by strong performance in key products like Cialis, Humalog, and Trajenta, alongside its animal health division. Net income saw a significant 15% increase to $4.68 billion, largely due to improved gross margins and lower operating expenses, further boosted by a lower effective tax rate and share repurchases. However, the report also highlights significant challenges. Cymbalta lost U.S. patent exclusivity in December 2013, leading to immediate generic competition and expected rapid revenue declines. Evista is also set to face similar pressures with patent expiration in March 2014. The company is actively managing these patent cliffs through robust R&D pipelines, with several promising candidates in late-stage development across therapeutic areas like diabetes, oncology, and neuroscience. Despite these challenges, Lilly's financial health appears solid, supported by strong cash flow and a commitment to returning value to shareholders through dividends and share repurchases.
Feb 19, 2014
2012
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2012
Eli Lilly and Company's 2012 10-K filing reveals a challenging year marked by a 7% decrease in worldwide revenue to $22.6 billion, primarily driven by the significant sales decline of Zyprexa following patent expirations in major markets. Net income and earnings per share also saw a decrease. Despite the revenue headwinds, the company highlighted growth in key products like Cymbalta, Forteo, Effient, and Alimta, alongside a strong performance in its animal health division (Elanco). Lilly's extensive research and development pipeline remains a significant focus, with numerous compounds in various stages of clinical trials, including promising candidates for diabetes, cancer, and Alzheimer's disease. The company also announced significant progress on dulaglutide and empagliflozin for diabetes treatment. Looking ahead, Lilly faces continued pressure from patent expiries, particularly for Cymbalta in late 2013, which is expected to materially impact future results. The company is strategically focusing on its patent-protected products, emerging markets, and animal health business to offset these challenges. Additionally, the filing details ongoing litigation, regulatory scrutiny, and the impact of healthcare reforms, all of which present ongoing risks and require careful management.
Feb 21, 2013
2011
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2011
Eli Lilly and Company's 2011 10-K filing highlights a year of revenue growth driven by key products like Cymbalta and insulin, alongside a notable increase in its Animal Health segment. However, this growth was offset by decreased net income, primarily due to the impact of U.S. healthcare reform, increased operating expenses, and charges related to restructuring and collaborations. The company is facing significant patent expirations for major products like Zyprexa and Cymbalta, which are expected to materially impact future revenues. Lilly is actively managing these challenges by investing heavily in its late-stage pipeline, exploring strategic collaborations, and focusing on emerging markets and its animal health business to drive future growth. The filing also details ongoing legal and regulatory matters, including patent litigation and investigations into marketing practices, which represent potential risks. The company's financial condition remains solid with substantial cash reserves and manageable debt, although it is largely self-insured for product liability claims. Investors should closely monitor the impact of patent expirations, the success of new product development, and the evolving regulatory landscape.
Feb 24, 2012
2010
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2010
Eli Lilly and Company's 2010 10-K filing highlights a year of 6% revenue growth, reaching $23.08 billion, driven by key products like Alimta, Cymbalta, and insulin products, alongside a strong performance in its animal health division. Net income saw a significant increase of 17% to $5.07 billion, with earnings per share rising to $4.58. However, the report also flags upcoming patent expirations for major products such as Zyprexa (October 2011) and Cymbalta (2013), which are expected to lead to a "rapid and severe decline" in sales due to generic competition, posing a material risk to future financial performance. The company's R&D investment increased to $4.88 billion, reflecting its commitment to developing new medicines, with a robust pipeline across various therapeutic areas including diabetes, oncology, and Alzheimer's disease. Despite this investment, the company faces ongoing patent challenges and the increasing impact of healthcare reforms and pricing pressures globally. Lilly is actively managing these risks through collaborations and a focus on its patent-protected portfolio, but investors should be aware of the significant headwinds from patent cliffs in the near term.
Feb 22, 2011
2009
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2009
Eli Lilly and Company's 2009 10-K filing highlights a year of revenue growth driven by key products like Alimta, Cymbalta, Humalog, and Zyprexa, along with the inclusion of Erbitux following the ImClone acquisition. The company also faced significant legal and regulatory challenges, notably related to Zyprexa's marketing practices and ongoing patent litigation for several major products, which resulted in substantial charges and ongoing legal defense costs. Looking ahead, Lilly emphasized its commitment to research and development, with over 60 drug candidates in human testing across various therapeutic areas. However, the company also acknowledged the critical challenge posed by upcoming patent expirations for several of its blockbuster drugs within the next few years, which will likely impact future revenues. Management is focused on cost-reduction initiatives and strategic business development to mitigate these patent cliff impacts and maintain long-term growth.
Feb 22, 2010
2008
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2008
Eli Lilly and Company's 2008 10-K filing reveals a challenging year marked by significant acquisition-related charges and legal settlements, which resulted in a net loss of $2.07 billion. Despite these headwinds, the company demonstrated resilience with a 9% increase in worldwide sales to $20.38 billion, driven by strong performance in key products like Cymbalta, Cialis, and Alimta. The acquisition of ImClone Systems for $6.5 billion significantly expanded Lilly's oncology portfolio and biotechnology capabilities, albeit with a substantial $4.69 billion charge for acquired in-process research and development. Of critical importance to investors are the substantial charges impacting the bottom line, primarily stemming from the ImClone acquisition and a $1.48 billion charge to resolve investigations into Zyprexa's marketing practices. These items overshadowed otherwise solid operational performance. The company also faces ongoing patent challenges and regulatory scrutiny, particularly concerning Zyprexa and other major products, which could impact future revenues and profitability. However, Lilly maintains a strong financial position with robust operating cash flow and a growing dividend, indicating management's confidence in its future prospects.
Feb 27, 2009
2007-A
ELI LILLY & Co Annual Report (Amendment), Year Ended Dec 31, 2007
Eli Lilly & Co. filed an amendment to its 2007 10-K on October 20, 2008, primarily to restate its consolidated balance sheets and selected financial data for certain prior periods. The restatement was necessitated by an adjustment to the company's reserve for future product returns, specifically related to the methodology for calculating this reserve in accordance with SFAS 48. The company states that this restatement had no effect on its income, cash flows, or liquidity, and the effects on its financial position were immaterial. In addition, certain disclosures regarding deferred tax assets, valuation allowances, and uncertain tax positions were modified, also without impacting the company's financial statements. The filing also provides updates on legal and regulatory matters, including ongoing patent litigation and investigations into marketing and promotional practices, particularly concerning the drug Zyprexa.
Oct 21, 2008
2007
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2007
Eli Lilly and Company's 2008 10-K filing for the fiscal year ended December 30, 2007, highlights a year of substantial growth, with worldwide sales increasing by 19% to $18.63 billion. This growth was largely fueled by the acquisition of ICOS and strong performance from key products like Cymbalta, Zyprexa, Alimta, Gemzar, and Humalog. The company demonstrated a continued commitment to research and development, investing 19% of its sales in R&D activities, signaling a focus on future innovation. Despite robust sales growth, the company faced increased operating expenses, partly due to the ICOS acquisition and increased marketing efforts. Net income and earnings per share saw a 11% increase, reaching $2.95 billion and $2.71 per share, respectively. However, the company also reported significant special charges and in-process R&D expenses related to acquisitions and strategic decisions. Investors should note the ongoing legal and regulatory matters, particularly those concerning Zyprexa, which have led to substantial settlement charges, and the potential impact of patent expirations in the coming years.
Feb 29, 2008
2006
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2006
Eli Lilly and Company's 2006 10-K filing reveals a company with strong sales growth, driven by key pharmaceutical products, alongside significant investments in research and development. The company reported a substantial increase in net income, despite notable charges related to Zyprexa product liability litigation. Lilly's business is diversified across several therapeutic areas, including neuroscience, endocrine, and oncology, with notable contributions from major drugs like Zyprexa, Cymbalta, and diabetes care products. The company faces ongoing risks, including intense competition, patent expirations, and increasing government regulation and pricing pressures. However, Lilly is actively managing these risks through strategic product development, acquisitions (such as ICOS), and robust legal defenses for its intellectual property. The financial outlook for 2007 projects continued earnings per share growth, supported by expected sales increases and ongoing R&D investment, while acknowledging the potential impact of legal matters and market dynamics.
Feb 28, 2007
2005
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2005
Eli Lilly & Company's 2005 Form 10-K reveals a company focused on pharmaceutical innovation, with significant revenue generated from its neuroscience and endocrine product segments. The company reported strong sales growth, driven by new product launches and expanded indications for existing drugs, despite some challenges with key products like Zyprexa and Strattera facing decreased demand or inventory adjustments. Lilly continues to invest heavily in research and development, underscoring its commitment to discovering new treatments. However, the company is navigating substantial legal and regulatory risks, most notably significant product liability charges related to Zyprexa and ongoing investigations into its marketing practices. These factors, alongside competitive pressures and evolving healthcare regulations, present material risks to future financial performance.
Mar 1, 2006
2004
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2004
Eli Lilly's 10-K for fiscal 2004 shows a year of solid top-line growth overshadowed by large one-time charges. Worldwide net sales rose 10% to $13.86 billion (U.S. +6% to $7.67 billion; outside the U.S. +15% to $6.19 billion), driven by new launches such as Strattera, Cymbalta, Alimta and Forteo, plus continued growth in Gemzar, Humalog and Evista. However, net income fell 29% to $1.81 billion ($1.66 per diluted share) from $2.56 billion, as the company absorbed a $465 million tax charge tied to planned repatriation of $8.00 billion of foreign earnings under the American Jobs Creation Act, $494 million of Q4 restructuring and impairment charges, a $36 million provision for the Evista marketing investigation, and $362 million of acquired in-process R&D from the Applied Molecular Evolution acquisition. The effective tax rate rose to 38.5% from 21.5%. The biggest investor concern is concentration and patent risk around Zyprexa, the company's largest product at $4.42 billion in 2004. U.S. Zyprexa sales fell 8%, management expects a slight decline in worldwide Zyprexa sales in 2005, and a pending generic patent challenge (compound patent expiring 2011) could materially accelerate that erosion if the trial court rules against Lilly. Lilly also faces product liability suits over Zyprexa (about 140 cases involving about 360 claimants, plus more than 3,050 tolled claims), an ongoing U.S. Attorney civil investigation into marketing practices for Zyprexa, Prozac and Prozac Weekly, and a potential Evista-related resolution. Management guided 2005 EPS to $2.80 to $2.90, including about $0.25 per share of new stock-option expense, with sales growth of 8% to 10%. Balance sheet and cash flow remain strong. Cash, equivalents and short-term investments rose $3.75 billion to $7.46 billion, operating cash flow was $2.87 billion, and the dividend was raised 7% to an indicated $1.52 annual rate, extending a 37-year streak of increases. Total debt rose to $6.51 billion, with the company's ratings at AA (S&P) and Aa3 (Moody's). Investors should weigh the strong franchise and dividend against the near-term earnings pressure, the Zyprexa patent and litigation exposure, and the costs of restructuring and pipeline spending.
Mar 8, 2005
2003
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2003
Eli Lilly's 2003 annual report shows a company that grew sales strongly but absorbed a sharp earnings decline as it reinvested heavily in the business. Worldwide net sales rose 14% to $12.58 billion, led by Zyprexa ($4.28 billion, now the first Lilly product above $4 billion), diabetes care, Gemzar, Evista, and the launches of Strattera, Cialis, and Forteo. Net income fell 5% to $2.56 billion ($2.37 per diluted share), reflecting higher marketing and administrative spending (up 18%), R&D of $2.35 billion (about 19% of sales), a gross margin that slipped to 78.7% from 80.4%, and roughly $382 million in asset impairment and restructuring charges, including Isis-related losses. The most important risk for investors is the Zyprexa U.S. compound patent challenge by generic makers (Zenith, Dr. Reddy's, Teva). Lilly says the patent runs to 2011 and that it expects to prevail, but a trial court ruling was expected in mid-2004 and an adverse outcome could sharply reduce earnings if generic olanzapine launched before appeals concluded. Other exposures include the Evista patent suit against Barr, Pfizer's challenge to Cialis, ongoing Department of Justice and other promotional-practice investigations, thimerosal and DES product liability suits, and the Medicare drug benefit and importation pressures on U.S. pricing. Balance sheet and cash flow remain strong. Operating cash flow was $3.65 billion, total debt was $4.88 billion, and the company held about $3.71 billion in cash and short-term investments. The company guided 2004 EPS to $2.80 to $2.85, low double-digit sales growth, and a dividend raised 6% to $.355 per quarter, while noting that a Zyprexa ruling could materially hurt results.
Mar 15, 2004
2002
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2002
Eli Lilly's 2002 10-K shows a company whose reported earnings fell while its growth pipeline matured. Net income was $2.71 billion, or $2.50 per diluted share, down 3% from $2.78 billion ($2.55) in 2001. Excluding unusual items (mainly acquired in-process R&D), adjusted EPS declined about 8% to $2.55 from $2.76. The decline was driven by the loss of U.S. patent protection for Prozac in August 2001, which cut worldwide reported sales 4% to $11.08 billion. U.S. sales fell 11% to $6.54 billion, while sales outside the U.S. rose 9% to $4.54 billion. The growth story is concentrated in a few products. Zyprexa (up 20% to $3.69 billion), Humalog, Evista, Gemzar and Xigris together generated $6.7 billion, or 61% of 2002 net sales, up from 48% in 2001. Management guided 2003 EPS, excluding unusual items, to $2.50 to $2.60. It also flagged roughly $200 million of incremental annual gross-margin costs tied to manufacturing upgrades, and said unusual restructuring and asset-impairment charges could follow. The main risks are regulatory and legal. The FDA has issued a warning letter on current good manufacturing practices (cGMP) and has not cleared all Indianapolis plants, which could delay approvals of Zyprexa IntraMuscular and Cymbalta. Lilly faces Paragraph IV generic challenges on Zyprexa and Evista, with an unfavorable outcome in either case described as potentially material. It also faces a DOJ subpoena on Evista promotion, product liability suits over thimerosal and DES, and a Zyprexa product-liability suit. Balance-sheet leverage rose, with total debt up $1.49 billion to $4.90 billion, and the dividend was raised 8% to an indicated $1.34 per share for 2003.
Mar 20, 2003
2000
ELI LILLY & Co Annual Report, Year Ended Dec 31, 2000
Eli Lilly closed fiscal 2000 with record results: net sales rose 9% to $10.86 billion, and income from continuing operations reached $3.06 billion, or $2.79 per diluted share (up from $2.30). Excluding unusual items, EPS was $2.65, up 16%. Growth was led by Zyprexa (+25% to $2.35 billion), Evista (+60%), Gemzar (+23%) and diabetes products (+22%). Gross margin expanded to 81.1% from 79.0%, while operating expenses grew 16% as R&D rose 13% to $2.02 billion and marketing and administrative spending rose 17%. Reported earnings also benefited from a $214 million gain on the Kinetra/WebMD transaction and roughly $267.9 million of net other income, largely from higher interest income on the cash balance. The central risk for investors is Prozac, which contributed about 24% of 2000 sales. The Federal Circuit upheld Lilly's February 2001 compound patent but invalidated the December 2003 method-of-use patent, and the company is seeking rehearing. Absent a reversal, generic fluoxetine could enter the U.S. around August 2001, and management expects a very substantial decline in U.S. Prozac sales over the following 12 months. For 2001, management guided to EPS of $2.75 to $2.85 excluding unusual items, which implies single-digit growth, with strong first-half growth expected to offset second-half Prozac erosion. Sales growth is guided to single digits overall but to the mid-teens excluding Prozac. Balance-sheet and capital-return items are also significant. Cash and short-term investments totaled $4.62 billion, debt was $2.82 billion, and the company repurchased about $1.09 billion of stock under its $3 billion program. The quarterly dividend was raised 8% to $0.28, an indicated annual rate of $1.12, marking 33 consecutive years of increases. Other risks include an FDA warning letter (March 2001) concerning cGMP deficiencies at a manufacturing site tied to a pending Zyprexa IM application, the FTC rebate investigation, and U.S. drug reimportation legislation. Management does not expect a material financial impact from the warning letter.
Mar 28, 2001
1999
ELI LILLY & Co Annual Report, Year Ended Dec 31, 1999
Eli Lilly's 10-K for fiscal 1999 shows a company in a strong growth phase after divesting its PCS Health Systems pharmacy benefit business in January 1999 for $1.60 billion. Net income was $2.72 billion ($2.46 diluted EPS), including a $174.3 million gain from the PCS sale and several unusual items. Income from continuing operations rose to $2.55 billion ($2.30 per share), and excluding unusual items, continuing income grew about 16% to $2.52 billion ($2.28 per share). Worldwide sales grew 8% to $10.0 billion, with volume growth of 9%, led by Zyprexa (+31%), Gemzar (+49%), ReoPro (+22%), diabetes care (+19%), and Evista (+126%). Prozac, the largest franchise at $2.61 billion, declined 7%, and anti-infectives fell 12%. For investors, the main watch items are patent exposure and product concentration. Prozac's U.S. compound patent expires in February 2001, and seven generic filers are challenging its patents, with a trial set for October 2000. Management also flagged pricing pressure from Medicaid rebates ($352.5 million in 1999), managed-care discounting, and a pricing antitrust suit. The balance sheet strengthened, with cash and short-term investments of $3.84 billion against total debt of $3.05 billion. The company completed a $1.5 billion share buyback in 1999 and raised its quarterly dividend 13% to $0.26 for 2000. Management guides to continued strong growth for Zyprexa, Gemzar, ReoPro, and Evista in 2000, slight declines in Prozac, and a continued decline in anti-infectives. Reported 1999 results benefited from roughly $0.20 per share of net unusual gains, including a $110 million litigation settlement, a $67.8 million gain on the Lorabid sale, and about $90 million of Y2K-related wholesaler buying, offset by a $150 million Foundation contribution and asset impairment charges. Investors should separate these items from underlying operating trends.
Mar 30, 2000
1998
ELI LILLY & Co Annual Report, Year Ended Dec 31, 1998
Eli Lilly's fiscal 1998 10-K shows a company in strong operating momentum, with worldwide net sales rising 16% to $9.24 billion and income from continuing operations before extraordinary item up 4% to $2.10 billion ($1.87 diluted EPS, or $1.94 excluding unusual items, a 19% increase on an underlying basis). Growth was led by newer launches: Zyprexa (up 98% to $1.44 billion), ReoPro (up 44%), Gemzar (up 76%), Evista (launched Q1 1998), and Humalog, while Prozac grew 10% to $2.81 billion. Gross margin improved to 78.2% from 75.6%, and R&D rose 27% to $1.74 billion, a deliberate reinvestment in the pipeline that management says includes 25 compounds in Phase II or III trials. Return on shareholders' equity reached 46.2%, supported by a $2 billion share repurchase completed in 1998 and a planned $1 billion repurchase in 1999. The filing also flags material risks. The largest is the Prozac patent litigation: the U.S. compound patent expires in February 2001 and the process patent in December 2003, and six generic challengers have filed ANDAs. Management says an adverse outcome could be materially damaging. Management also flagged that Prozac growth is expected to be only slight in 1999 due to wholesaler destocking and competition, anti-infective and Axid sales are expected to decline, and pricing pressure from managed care and Medicaid rebates (up to $278.6 million in 1998) continues to build. Divestiture of the PCS health-care-management unit to Rite Aid for $1.6 billion closed in January 1999, with a first-quarter gain of roughly $165-185 million expected. For investors, the key questions are whether the newer-product portfolio (Zyprexa, Evista, Gemzar, ReoPro, Humalog) can offset the expected Prozac slowdown and the Prozac patent cliff, and whether the increased R&D spend converts into approvals. The balance sheet is solid, with $1.6 billion in cash and short-term investments against $2.37 billion of total debt, and the dividend was raised 15% for 1999 to an indicated $0.92 per share, extending a 31-year streak of increases.
Mar 26, 1999
1997
ELI LILLY & Co Annual Report, Year Ended Dec 31, 1997
Eli Lilly's 1997 10-K presents a year split between a large non-cash hit and a strong underlying business. Reported 1997 results include a net loss of $385.1 million ($0.35 per share), the company's first annual loss in its history, driven by a $2.44 billion asset impairment on goodwill and long-lived assets of its PCS Health Systems pharmacy benefit management unit, partly offset by a $631.8 million pretax gain from the sale of its 40% DowElanco stake to Dow Chemical. Excluding these significant items, management reports 1997 net income of $1.77 billion ($1.57 per diluted share), up roughly 22% on an adjusted basis, on sales that rose 16% to $8.52 billion. The operating story is one of growth led by newer products. Zyprexa (schizophrenia) contributed $730 million in sales, Gemzar and ReoPro grew sharply, and Prozac reached $2.56 billion worldwide, though its U.S. patent expiration in 2001 and ongoing Barr and Geneva patent challenges are material risks. Anti-infective sales fell 12% under generic pressure, and management expects further declines in 1998. Gross margin improved to 72.3%, and the company continued to invest heavily in R&D, which rose 16% to $1.38 billion. Balance sheet and cash flow remained solid. Operating cash flow was $2.40 billion, total debt fell $1.18 billion to $2.55 billion, and cash and short-term investments rose to about $2.02 billion. The quarterly dividend was raised to an indicated $0.80 annual rate for 1998, extending a 30-year record of increases. Key legal exposures include Prozac patent litigation, product liability suits involving DES and Prozac, and industry-wide pharmacy pricing antitrust cases. The company also faces a pending FTC investigation into its PBM relationships.
Mar 24, 1998
1995
ELI LILLY & Co Annual Report, Year Ended Dec 31, 1995
Eli Lilly's 1995 10-K reflects a company that completed a major portfolio reshaping while growing its core pharmaceutical business strongly. Worldwide net sales rose 18% to $6.76 billion, driven by a 17% increase in unit volume, with Prozac (up 24% to about $2.1 billion) leading growth. Income from continuing operations rose 10% to $1.31 billion, or $2.30 per share. Reported net income more than doubled to $2.29 billion ($4.03 per share), but this was inflated by a $921.5 million after-tax gain from the divestiture of the Medical Device and Diagnostics businesses, primarily the September 1995 Guidant splitoff. Investors should therefore focus on the continuing-operations figures when judging underlying earnings power. The balance sheet and cash flow profile remain sound. Cash, equivalents and short-term investments reached $1.1 billion, total debt fell $348.5 million to $4.5 billion largely because Guidant debt left the company, and operating cash flow was $1.82 billion. However, interest expense rose to $286.3 million after the 1994 $4.1 billion PCS Health Systems acquisition, and goodwill amortization weighed on other income. Management guided that R&D spending will grow faster than sales for at least the next year as raloxifene and olanzapine advance through late-stage trials. The main risks are pricing and legal exposure. U.S. cefaclor sales fell 42% to $227.5 million under generic competition, and management expects that decline to continue in 1996. Managed-care and Medicaid discounts are expected to rise, and the company faces a large set of antitrust and pricing suits, including a federal class action settled for an immaterial amount. Patent protection for Prozac (2001), Axid (2002) and Lorabid (2006) will eventually expire, so the company's long-term growth depends on its pipeline.
Mar 25, 1996
1993
ELI LILLY & Co Annual Report, Year Ended Dec 31, 1993
Eli Lilly's 1993 10-K shows a year dominated by a large restructuring. Worldwide sales rose 5% to $6.45 billion, driven by a 6% rise in unit volume, with pharmaceuticals up about 7% to $4.7 billion (led by Axid and Prozac) and medical devices and diagnostics up about 4% to $1.3 billion. However, the company recorded $1.17 billion in restructuring and special charges (about $856 million after tax, or $2.91 per share), mainly from roughly 2,600 early retirements. Net income fell 32% to $480.2 million, or $1.63 per share, down from $2.41 in 1992. Before the charges, earnings were largely stable, but the company's operating cost base was reset. The balance sheet remains sound. Cash and short-term investments totaled about $987 million, shareholders' equity was $4.57 billion, and long-term debt rose to $835 million after a $350 million issuance. Dividends rose 10% to $2.42 per share, extending a 26-year streak of increases. However, the Moody's rating was cut to Aa1 from AAA in January 1994. Management also flagged rising pressure from U.S. managed care and Medicaid rebates ($156 million in 1993, up 44%), the expiration of key patents (Ceclor in the U.S. in 1992, Dobutrex in October 1993, with U.S. Dobutrex sales down about 75% in early 1994), and health-care reform. Strategically, Lilly announced in January 1994 its intent to divest most of its Medical Devices and Diagnostics division, with six businesses to be spun off or publicly offered and three sold separately. The company also pursued a letter of intent to acquire Sphinx Pharmaceuticals, and it refocused R&D on five therapeutic areas. Investors should weigh the near-term earnings hit and expected cost savings against continued pricing pressure, patent expirations, and the pace of the MDD divestiture.
Mar 25, 1994