Summary
Eli Lilly and Company reported strong financial performance for the first quarter of 2018, with a significant turnaround from the prior year. Revenue increased by 9% year-over-year to $5.7 billion, driven by favorable foreign exchange rates, higher realized prices, and increased product volumes. This revenue growth, coupled with a reduction in operating expenses (down 5%), led to a substantial net income of $1.2 billion, a significant improvement from a net loss of $110.8 million in the first quarter of 2017. The company also benefited from lower asset impairment, restructuring, and special charges compared to the previous year, and the absence of a large acquired in-process R&D charge that impacted 2017 results. The company is actively managing its late-stage pipeline, with several new molecular entities (NMEs) in various stages of development and regulatory review, including treatments for migraine, Alzheimer's disease, and diabetes. However, the company faces ongoing challenges related to patent expirations for key products like Cialis and Alimta, which are expected to lead to a decline in revenue due to generic competition. Eli Lilly is also exploring strategic alternatives for its Elanco Animal Health business.
Financial Highlights
53 data points| Revenue | $4.96B |
| Cost of Revenue | $1.16B |
| Gross Profit | $3.80B |
| R&D Expenses | $1.11B |
| SG&A Expenses | $1.34B |
| Operating Expenses | $2.45B |
| Interest Expense | $61.20M |
| Net Income | $1.22B |
| EPS (Basic) | $1.16 |
| EPS (Diluted) | $1.16 |
| Shares Outstanding (Basic) | 1.05B |
| Shares Outstanding (Diluted) | 1.05B |
Key Highlights
- 1Total revenue increased 9% to $5.7 billion, driven by volume, price, and favorable foreign exchange rates.
- 2Net income swung from a loss of $110.8 million in Q1 2017 to a profit of $1.2 billion in Q1 2018.
- 3Diluted earnings per share (EPS) improved significantly to $1.16, compared to a loss of $0.10 in the prior year's quarter.
- 4Operating expenses decreased by 5% due to lower marketing, selling, and administrative, as well as research and development expenses.
- 5The company is facing significant patent expirations for products like Cialis and Alimta, which are expected to negatively impact future revenue.
- 6Eli Lilly is conducting a strategic review of its Elanco Animal Health business, with potential outcomes including an IPO, merger, or sale.
- 7Several key new drug candidates are progressing through late-stage clinical trials and regulatory review, including treatments for migraine and Alzheimer's disease.