Summary
Eli Lilly and Company's (LLY) third quarter 2016 report shows a 5% increase in revenue to $5.19 billion, driven by strong performance in the U.S. and growth in key products like Trulicity and Erbitux. Despite the revenue growth, net income saw a slight decrease of 3% to $778 million, primarily due to higher operating expenses, particularly in research and development, and a significant charge related to the Venezuelan financial crisis. Looking ahead, the company faces ongoing challenges related to patent expirations for key products such as Alimta, Cymbalta, Strattera, Effient, and Cialis, which are expected to materially impact future revenues. However, Lilly is actively managing its product portfolio, with new approvals like Taltz and Portrazza, and a robust pipeline including Baricitinib and Abemaciclib, aiming to mitigate these risks and drive future growth.
Financial Highlights
53 data points| Revenue | $5.19B |
| Cost of Revenue | $1.40B |
| Gross Profit | $3.79B |
| R&D Expenses | $1.24B |
| SG&A Expenses | $1.57B |
| Operating Expenses | $2.80B |
| Interest Expense | $47.20M |
| Net Income | $778.00M |
| EPS (Basic) | $0.74 |
| EPS (Diluted) | $0.73 |
| Shares Outstanding (Basic) | 1.06B |
| Shares Outstanding (Diluted) | 1.06B |
Key Highlights
- 1Revenue increased by 5% to $5.19 billion for the quarter, and 6% to $15.46 billion for the nine months ended September 30, 2016.
- 2Net income for the quarter decreased by 3% to $778 million ($0.73 per share), while for the nine-month period, it increased by 2% to $1.97 billion ($1.85 per share).
- 3Research and development expenses increased by 8% for the quarter and 13% for the nine months, reflecting investment in late-stage clinical development and milestone payments for key pipeline drugs.
- 4Significant charges were incurred in 2015 related to acquired in-process R&D ($336 million) and debt repurchase ($152.7 million), which are not present in the current period's results.
- 5The company announced an agreement to acquire Boehringer Ingelheim Vetmedica, Inc.'s U.S. animal health vaccine portfolio for approximately $885 million.
- 6Several key products, including Alimta, Cymbalta, Zyprexa, Strattera, Effient, and Cialis, are facing or will soon face patent expirations and generic competition, posing a significant risk to future revenues.
- 7The company received regulatory approval for Taltz® (ixekizumab) for psoriasis and psoriatic arthritis, and Portrazza® (necitumumab) for lung cancer, and has a strong pipeline with baricitinib and abemaciclib in late-stage development.