10-K/APeriod: FY2007

ELI LILLY & Co Annual Report (Amendment), Year Ended Dec 31, 2007

Filed October 21, 2008For Securities:LLY

Summary

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.

Financial Highlights

22 data points
Beta

Revenue

$18.63B

77.2% Gross Margin

Net Income

$2.95B

15.8% Net Margin

Cash & Equivalents

$3.22B

Free Cash Flow

$5.15B

Financial Statements
Beta
Revenue$18.63B
Cost of Revenue$4.25B
Gross Profit$14.38B
R&D Expenses$3.49B
SG&A Expenses$6.10B
Net Income$2.95B

Key Highlights

  • 1Restatement of prior period financial statements due to an adjustment in the reserve for future product returns.
  • 2The restatement had no impact on income, cash flows, or liquidity, and the effects on financial position were deemed immaterial.
  • 3Modifications were made to disclosures concerning deferred tax assets, valuation allowances, and uncertain tax positions.
  • 4The company is involved in significant patent litigation, particularly challenging generic manufacturers of its key products like Evista, Gemzar, and Strattera.
  • 5Eli Lilly is also facing investigations related to its marketing and promotional practices, particularly concerning Zyprexa, Prozac, and Evista.
  • 6Substantial charges have been recorded for Zyprexa product liability litigation, with ongoing legal battles and settlements impacting financial results.
  • 7The company reported strong sales growth in 2007, driven by key products such as Cymbalta and the acquisition of ICOS (maker of Cialis).

Frequently Asked Questions

This filing is an amendment to restate the consolidated balance sheets and selected financial data for prior periods due to an adjustment in the company's reserve for future product returns. This adjustment was identified as needing correction based on a revised methodology.

Eli Lilly stated that the restatement had no effect on its income, cash flows, or liquidity. The financial position effects at the end of the restated periods were also considered immaterial.

Yes, the filing details ongoing patent litigation related to key products such as Evista, Gemzar, and Strattera, as well as challenges to Zyprexa patents in various international markets. Additionally, the company is subject to investigations regarding its marketing and promotional practices, particularly concerning Zyprexa.

The acquisition of ICOS, completed in January 2007, brought the full value of Cialis to Eli Lilly and contributed significantly to the company's sales growth in 2007. The acquisition also resulted in substantial acquired in-process research and development (IPR&D) charges.

For the full year 2008, Eli Lilly projected earnings per share in the range of $3.80 to $3.95 and expected sales to grow in the mid-to-high single digits, driven by key products like Cymbalta, Cialis, Byetta, Alimta, and Humalog.