Summary
Eli Lilly and Company reported a significant decrease in revenue and net income for the first quarter of 2014 compared to the same period in 2013. This decline was primarily attributed to the loss of U.S. patent exclusivity for key products like Cymbalta and Evista, leading to the introduction of generic competition. Despite the revenue drop, the company saw some growth in international markets and from its animal health division. Management highlighted ongoing efforts to manage costs and a robust late-stage pipeline with several promising drug candidates in development. The company also announced a significant agreement to acquire Novartis Animal Health for approximately $5.4 billion, signaling a strategic expansion into the animal health sector. Financial expectations for the full year 2014 were updated to reflect these developments, with an expected EPS range of $2.70 to $2.78.
Financial Highlights
52 data points| Revenue | $4.68B |
| Cost of Revenue | $1.22B |
| Gross Profit | $3.46B |
| R&D Expenses | $1.11B |
| SG&A Expenses | $1.48B |
| Operating Expenses | $2.59B |
| Interest Expense | $37.80M |
| Net Income | $727.90M |
| EPS (Basic) | $0.68 |
| EPS (Diluted) | $0.68 |
| Shares Outstanding (Basic) | 1.07B |
| Shares Outstanding (Diluted) | 1.08B |
Key Highlights
- 1Total revenue for Q1 2014 decreased by 16% to $4.68 billion, largely due to patent expirations for Cymbalta and Evista in the U.S.
- 2Net income saw a substantial decrease of 53% to $727.9 million, with diluted EPS falling to $0.68 from $1.42 in Q1 2013.
- 3The company announced an agreement to acquire Novartis Animal Health for approximately $5.4 billion, aiming to strengthen its Elanco division.
- 4Research and development expenses decreased by 18% to $1.11 billion, partly due to lower milestone payments compared to the prior year.
- 5Collaboration and other revenue increased by 18% to $181.2 million, driven by products like Trajenta and Erbitux.
- 6The company updated its 2014 financial guidance, expecting EPS in the range of $2.70 to $2.78 and total revenue between $19.4 billion and $20.0 billion.
- 7Significant legal proceedings are ongoing, including Alimta patent litigation and Actos product liability litigation, though the company believes most matters will not have a material adverse effect on its financial position.