10-QPeriod: Q3 FY2020

ELI LILLY & Co Quarterly Report for Q3 Ended Sep 30, 2020

Filed October 28, 2020For Securities:LLY

Summary

Eli Lilly and Company (LLY) reported a 5% increase in revenue for the third quarter of 2020, reaching $5.74 billion, and a 6% increase year-to-date to $17.10 billion. This growth was primarily driven by increased product volume across key therapeutic areas, including diabetes and immunology, despite some pricing pressures. Net income for the quarter slightly decreased by 4% to $1.21 billion, translating to diluted EPS of $1.33, compared to $1.37 in the prior year. However, year-to-date net income saw a substantial 30% increase to $4.08 billion, excluding the impact of discontinued operations and a significant gain from the Elanco disposition in the prior year. The company continued to invest heavily in research and development, with a focus on COVID-19 treatments and its robust late-stage pipeline. Acquisitions in 2020, such as Dermira, strengthened the company's portfolio. Lilly's financial position remains strong, with increased cash and cash equivalents and access to credit facilities, enabling continued operations and strategic investments. The company reaffirmed its full-year 2020 revenue guidance and updated its EPS guidance.

Financial Highlights

52 data points
Beta

Revenue

$5.74B

76.9% Gross Margin

Net Income

$1.21B

21.1% Net Margin

EPS (Diluted)

$1.33

Total Assets

$43.95B

Cash & Equivalents

$3.60B

Free Cash Flow

$1.81B

Financial Statements
Beta
Revenue$5.74B
Cost of Revenue$1.33B
Gross Profit$4.41B
R&D Expenses$1.47B
SG&A Expenses$1.57B
Interest Expense$89.60M
Net Income$1.21B
EPS (Basic)$1.33
EPS (Diluted)$1.33
Shares Outstanding (Basic)907.20M
Shares Outstanding (Diluted)911.40M

Key Highlights

  • 1Revenue increased 5% to $5.74 billion in Q3 2020 and 6% year-to-date to $17.10 billion, primarily driven by volume growth.
  • 2Net income for Q3 2020 decreased 4% to $1.21 billion, with diluted EPS of $1.33.
  • 3Year-to-date net income increased 30% to $4.08 billion, benefiting from strong operational performance.
  • 4Significant R&D investments continued, with increased spending on COVID-19 therapies and a robust late-stage pipeline.
  • 5Acquisitions of Dermira and Loxo Oncology are expected to contribute to future growth and pipeline diversification.
  • 6The company maintained a strong liquidity position with increased cash reserves and access to credit facilities.
  • 7Full-year 2020 revenue guidance was reaffirmed, and EPS guidance was updated.

Frequently Asked Questions

Revenue growth was primarily driven by increased product volume across key therapeutic areas, particularly in diabetes and immunology. Key products like Trulicity, Taltz, and Jardiance showed strong performance, contributing to the overall revenue increase.

The COVID-19 pandemic negatively impacted consolidated operating results, primarily due to decreases in new prescriptions from fewer patient visits and changes in payer mix. However, the company was able to largely maintain normal operations and did not experience material impairments to its assets or significant negative impacts on its liquidity position.

While products like Forteo have experienced declines due to patent expirations and generic competition, the company anticipates this will have a material adverse effect on future results. However, key growth drivers like Trulicity, Taltz, and Jardiance are performing well. The company also faces ongoing patent litigation for Alimta, with outcomes that could materially impact future results.

Eli Lilly continued to invest heavily in research and development, including significant expenditures on COVID-19 antibody therapies and baricitinib. The company also completed the acquisition of Dermira, Inc. in February 2020, adding lebrikizumab and Qbrexza to its portfolio, and the acquisition of Loxo Oncology in February 2019, which brought selpercatinib and LOXO-305.