Summary
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.
Financial Highlights
53 data points| Revenue | $21.49B |
| Cost of Revenue | $4.68B |
| Gross Profit | $16.81B |
| R&D Expenses | $5.05B |
| SG&A Expenses | $5.98B |
| Interest Expense | $242.50M |
| Net Income | $3.23B |
| EPS (Basic) | $3.14 |
| EPS (Diluted) | $3.13 |
| Shares Outstanding (Basic) | 1.03B |
| Shares Outstanding (Diluted) | 1.03B |
Key Highlights
- 1Revenue increased by 7% in 2018, reaching $24.56 billion, driven by strong volume growth in key pharmaceutical products such as Trulicity, Taltz, Basaglar, and Jardiance.
- 2The company achieved net income of $3.23 billion in 2018, a significant improvement from a net loss of $204.1 million in 2017, partly due to a lower effective tax rate following the 2017 Tax Act.
- 3Eli Lilly completed the initial public offering (IPO) of its animal health subsidiary, Elanco Animal Health Incorporated, retaining a significant stake, with plans for further divestiture.
- 4Significant investments were made in R&D and acquisitions, including the acquisition of ARMO Biosciences for $1.98 billion, focusing on expanding the pipeline in areas like oncology and immunology.
- 5The company faces patent expirations for key products like Cialis (expired in 2018) and Forteo (use patents expiring in August 2019), anticipating revenue declines and increased generic competition in these areas.
- 6Lilly is actively managing its product portfolio, with notable revenue declines for Cialis, Forteo, Strattera, and Zyprexa due to patent expiries and generic competition.
- 7The company anticipates ongoing pricing and reimbursement pressures from both governmental and private payers in the U.S. and internationally, which could impact future financial performance.