INDIANAPOLIS, April 25, 2017 /PRNewswire/ -- Eli Lilly and
Company (NYSE: LLY) today announced financial results for the first
quarter of 2017.
|
|
|
|
|
$ in millions, except
per share data
|
First
Quarter
|
%
|
|
2017
|
|
2016
|
Change
|
Revenue
|
$
|
5,228.3
|
|
|
$
|
4,865.1
|
|
7
|
%
|
Net Income (Loss) –
Reported
|
(110.8)
|
|
|
440.1
|
|
NM
|
Earnings (Loss) Per
Share – Reported
|
(0.10)
|
|
|
0.41
|
|
NM
|
|
|
|
|
|
Net Income –
Non-GAAP
|
1,039.6
|
|
|
882.3
|
|
18
|
%
|
EPS –
Non-GAAP
|
0.98
|
|
|
0.83
|
|
18
|
%
|
Certain financial information for 2017 and 2016 is presented on
both a reported and a non-GAAP basis. Some numbers in this press
release may not add due to rounding. Reported results were prepared
in accordance with generally accepted accounting principles (GAAP)
and include all revenue and expenses recognized during the periods.
Non-GAAP measures exclude the items described in the reconciliation
tables later in the release. The company's 2017 financial
guidance is also being provided on both a reported and a non-GAAP
basis. The non-GAAP measures are presented to provide additional
insights into the underlying trends in the company's business.
"Lilly's new product launches, including Trulicity and Taltz,
led the company to a strong quarter of volume-driven revenue
growth. We achieved this growth while maintaining our commitment to
expand margins and improve productivity," said David A. Ricks, Lilly's president and
CEO. "The progress we made in the first quarter continues the
positive momentum we've built over the past few years. We remain on
track to sustain a steady flow of innovation that has the potential
to improve patients' lives and create value for shareholders."
Key Events Over the Last Three Months
Commercial
- The company and Boehringer Ingelheim launched
Synjardy® XR (empagliflozin and metformin hydrochloride
extended-release) tablets in the U.S. for adults with type 2
diabetes. Synjardy is part of the company's alliance with
Boehringer Ingelheim.
Regulatory
- With respect to Olumiant® (baricitinib) on
which we collaborate with Incyte:
-
- The European Commission granted marketing authorization for 4
mg and 2 mg film-coated tablets in the European Union for
the treatment of moderate-to-severe active rheumatoid arthritis in
adult patients who have responded inadequately to, or who are
intolerant to, one or more disease-modifying antirheumatic drugs.
Olumiant has been launched in select European countries.
- The U.S. Food and Drug Administration (FDA) issued a complete
response letter for the New Drug Application (NDA) of baricitinib,
an investigational medication for the treatment of
moderate-to-severe rheumatoid arthritis, indicating that the FDA is
unable to approve the application in its current form. The FDA
specifically stated that additional clinical data are needed to
determine the most appropriate doses and to further characterize
safety concerns across treatment arms.
- The European Commission approved an update to the Synjardy
label to include a change to the indication statement and inclusion
of data on the reduction of risk of cardiovascular death in
patients with type 2 diabetes and established cardiovascular
disease when treated with empagliflozin.
- The FDA approved updates to the label for Trulicity®
(dulaglutide) to include use in combination with basal insulin for
adults with type 2 diabetes.
Clinical
- With respect to Phase 3 trials of abemaciclib, a
cyclin-dependent kinase (CDK)4 and CDK6 inhibitor, being tested in
women with hormone-receptor-positive (HR+), human epidermal growth
factor receptor 2-negative (HER2-) advanced breast cancer:
-
- The company announced that abemaciclib, in combination with
fulvestrant, in women who have relapsed or progressed after
endocrine therapy was superior to fulvestrant plus placebo on
progression-free survival. Lilly intends to initiate global
submissions of these results, as well as for single-agent
abemaciclib based on a previous Phase 2 study, beginning in the
second quarter of 2017.
- The company announced results of a preplanned interim analysis,
evaluating abemaciclib, in combination with an aromatase inhibitor
(letrozole or anastrozole), compared to treatment with an aromatase
inhibitor plus placebo. The trial met its primary endpoint of
demonstrating statistically significant improvement in
progression-free survival. In addition, improvement was shown in a
key secondary endpoint of objective response rate. Lilly intends to
begin global submissions of these results in the third quarter of
2017.
- The company announced that patients with moderate-to-severe
plaque psoriasis treated with Taltz® (ixekizumab)
demonstrated superior efficacy at 24 weeks compared to patients
treated with Stelara® (ustekinumab).
Business Development/Other
- The company completed its acquisition of CoLucid
Pharmaceuticals. As a result of this acquisition, lasmiditan, in
development for the acute treatment of migraine, has been added to
Lilly's Phase 3 pipeline.
- The Japan IP High Court confirmed the decisions of the Japan
Patent Office and ruled in Lilly's favor in the invalidation trials
initiated by Sawai regarding Lilly's vitamin regimen patents for
Alimta® (pemetrexed disodium).
- The company announced plans to invest $850 million in
its U.S. operations in 2017. The company's investments
span facilities across its U.S. enterprise, including
research laboratories, manufacturing sites, and general and
administrative areas. The investments are being driven by demand
for Lilly products, as well as the company's robust pipeline of
potential medicines in development targeting cancer, pain, diabetes
and other unmet medical needs.
First-Quarter Reported Results
In the first quarter of 2017, worldwide revenue was $5.228 billion, an increase of 7 percent
compared with the first quarter of 2016. The revenue increase was
driven by an 8 percent increase due to volume, partially
offset by a 1 percent decrease due to the unfavorable impact of
foreign exchange rates. The increase in worldwide volume was
largely due to 9 percent pharmaceutical growth driven by Trulicity,
Taltz and other new products including Cyramza®,
LartruvoTM, Basaglar® and
Jardiance®. To a lesser extent, the increase in volume
was also driven by companion animal products due to the inclusion
of $40.8 million in revenue from the
acquisition of Boehringer Ingelheim Vetmedica's U.S. feline, canine
and rabies vaccine portfolio. These total volume increases were
partially offset by decreased volumes for Zyprexa® and
Alimta®.
Revenue in the U.S. increased 15 percent, to $2.934 billion, driven primarily by
increased volumes for Trulicity, Taltz, Lartruvo and companion
animal products due to the inclusion of revenue from the
acquisition of Boehringer Ingelheim Vetmedica's U.S. feline, canine
and rabies vaccine portfolio, partially offset by decreased volume
for Alimta. Realized prices increased U.S. revenue by 3 percent,
primarily driven by Humalog®, which had significant
unfavorable changes to rebates and discounts in the first quarter
of 2016 that did not recur in the first quarter of 2017.
Revenue outside the U.S. decreased 1 percent, to
$2.295 billion, due to lower realized
prices and volume from the loss of exclusivity for several products
including Cymbalta® in Canada and Europe, Zyprexa in Japan and Alimta in numerous countries, as
well as the unfavorable impact of foreign exchange rates. These
were largely offset by increased volume for several newly launched
pharmaceutical products, including Trulicity and Cyramza.
Gross margin increased 10 percent, to $3.901 billion, in the first quarter of 2017
compared with the first quarter of 2016. Gross margin as a percent
of revenue was 74.6 percent, an increase of 1.8 percentage points
compared with the first quarter of 2016. The increase in gross
margin percent was primarily due to manufacturing efficiencies.
Operating expenses in the first quarter of 2017, defined as the
sum of research and development, and marketing, selling and
administrative expenses, were $2.783
billion, an increase of 3 percent compared with the
first quarter of 2016. Research and development expenses increased
1 percent, to $1.238 billion, or
23.7 percent of revenue. Marketing, selling and administrative
expenses increased 5 percent, to $1.545 billion, due to increased expenses
related to new pharmaceutical products, partially offset by
decreased expenses related to late life-cycle products. Operating
expenses were 53.2 percent of revenue in the first quarter of 2017,
a reduction of 2.2 percentage points compared with the first
quarter of 2016.
In the first quarter of 2017, the company recognized an acquired
in-process research and development charge of $857.6 million associated with the acquisition of
CoLucid Pharmaceuticals. There were no acquired in-process research
and development charges in the first quarter of 2016.
In the first quarter of 2017, the company recognized asset
impairment, restructuring and other special charges of $213.9 million, primarily related to severance
costs incurred as a result of actions taken to reduce the company's
cost structure, as well as integration costs related to the
acquisition of Novartis Animal Health. In the first quarter of
2016, the company recognized asset impairment, restructuring and
other special charges of $131.4 million, composed of asset
impairments related to the closure of an animal health
manufacturing facility in Ireland
and integration costs related to the acquisition of Novartis Animal
Health.
Operating income in the first quarter of 2017 was $46.1 million, a decrease of $669.7 million compared with the first quarter of
2016, primarily driven by an acquired in-process research and
development charge for the acquisition of CoLucid Pharmaceuticals,
partially offset by revenue growth.
Other income (expense) was income of $15.1 million in the first quarter of 2017,
compared with expense of $149.0
million in the first quarter of 2016. Other expense in the
first quarter of 2016 was driven by a $203.9
million charge related to the impact of the Venezuelan
financial crisis.
During the first quarter of 2017, the company incurred
$172.0 million of income tax expense,
despite earning $61.2 million of
income before income taxes, as a result of the nondeductible
$857.6 million acquired in-process
research and development charge for the acquisition of CoLucid
Pharmaceuticals. During the first quarter of 2016, the
company's effective tax rate was 22.4 percent.
In the first quarter of 2017, net income (loss) and earnings
(loss) per share were $(110.8) million and $(0.10), respectively, compared with $440.1 million and $0.41, respectively, in the first quarter of
2016. These decreases in net income (loss) and earnings (loss) per
share were primarily driven by lower operating income, partially
offset by higher other income.
First-Quarter Non-GAAP Measures
On a non-GAAP basis, first quarter 2017 gross margin increased
10 percent, to $4.085 billion.
Gross margin as a percent of revenue was 78.1 percent, an increase
of 1.8 percentage points compared with the first quarter of 2016.
The increase in gross margin percent was primarily due to
manufacturing efficiencies.
Operating expenses were 53.2 percent of revenue in the first
quarter of 2017, a reduction of 2.2 percentage points compared with
the first quarter of 2016.
Operating income increased $284.4
million, or 28 percent, to $1.304
billion in the first quarter of 2017, due to revenue growth,
partially offset by higher operating costs related to new
products.
The effective tax rate was 21.2 percent in the first
quarter of 2017, compared with 17.9 percent in the first quarter of
2016. The higher effective tax rate for the first quarter of 2017
was primarily due to a net discrete tax benefit of approximately
$50 million in 2016.
In the first quarter of 2017, net income and earnings per share
increased 18 percent, to $1.040
billion, and $0.98,
respectively, compared with $882.3
million, and $0.83,
respectively, in the first quarter of 2016. The increases in net
income and earnings per share were primarily driven by higher
operating income, partially offset by a higher effective tax rate
and lower other income.
For further detail of non-GAAP measures, see the reconciliation
below as well as the Reconciliation of GAAP Reported to Selected
Non-GAAP Adjusted Information table later in this press
release.
|
First
Quarter
|
|
2017
|
|
2016
|
% Change
|
Earnings (loss)
per share (reported)
|
$
|
(0.10)
|
|
|
$
|
0.41
|
|
NM
|
Acquired in-process
research and development
|
.81
|
|
|
—
|
|
|
Asset impairment,
restructuring and other special charges
|
.16
|
|
|
.11
|
|
|
Amortization of
intangible assets
|
.11
|
|
|
.11
|
|
|
Inventory step up
costs associated with the acquisition of
Boehringer Ingelheim Vetmedica's U.S. feline, canine and
rabies vaccines portfolio
|
.01
|
|
|
—
|
|
|
Venezuela
charge
|
—
|
|
|
.19
|
|
|
Earnings per share
(non-GAAP)
|
$
|
0.98
|
|
|
$
|
0.83
|
|
18%
|
|
|
|
|
|
Numbers may not add
due to rounding.
|
|
|
|
|
Select Revenue
Highlights
|
|
|
|
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|
(Dollars in
millions)
|
First
Quarter
|
|
|
|
Established
Pharmaceutical Products
|
2017
|
|
2016
|
|
% Change
|
|
Humalog
|
$
|
708.4
|
|
|
$
|
606.3
|
|
|
17%
|
|
Cialis®
|
533.6
|
|
|
576.7
|
|
|
(7)%
|
|
Alimta
|
489.9
|
|
|
564.2
|
|
|
(13)%
|
|
Forteo®
|
347.5
|
|
|
318.6
|
|
|
9%
|
|
Humulin®
|
314.5
|
|
|
356.4
|
|
|
(12)%
|
|
Strattera®
|
196.2
|
|
|
188.1
|
|
|
4%
|
|
Cymbalta
|
174.6
|
|
|
198.7
|
|
|
(12)%
|
|
Erbitux®
|
154.4
|
|
|
168.1
|
|
|
(8)%
|
|
Zyprexa
|
147.5
|
|
|
212.8
|
|
|
(31)%
|
|
Effient®
|
127.8
|
|
|
131.5
|
|
|
(3)%
|
|
|
|
|
|
|
|
|
New Pharmaceutical
Products
|
|
|
|
|
|
|
Trulicity
|
372.9
|
|
|
143.6
|
|
|
160%
|
|
Cyramza
|
171.2
|
|
|
131.0
|
|
|
31%
|
|
Taltz
|
96.6
|
|
|
—
|
|
|
NM
|
|
Jardiance(a)
|
74.0
|
|
|
38.2
|
|
|
94%
|
|
Basaglar
|
46.0
|
|
|
10.9
|
|
|
321%
|
|
Lartruvo
|
42.1
|
|
|
—
|
|
|
NM
|
|
Portrazza®
|
3.6
|
|
|
1.7
|
|
|
108%
|
|
Olumiant
|
1.9
|
|
|
—
|
|
|
NM
|
|
Subtotal
|
808.3
|
|
|
325.4
|
|
|
148%
|
|
|
|
|
|
|
|
|
Animal
Health
|
769.4
|
|
|
754.6
|
|
|
2%
|
|
|
|
|
|
|
|
|
Total
Revenue
|
5,228.3
|
|
|
4,865.1
|
|
|
7%
|
|
|
|
|
|
|
|
|
(a)
Jardiance includes Glyxambi® and Synjardy
NM – not
meaningful
Numbers may not add
due to rounding
|
Selected Established Pharmaceutical Products
Humalog
For the first quarter of 2017, worldwide Humalog revenue
increased 17 percent compared with the first quarter of 2016, to
$708.4 million. Revenue in the U.S.
increased 24 percent, to $449.1
million, primarily driven by decreased revenue in the first
quarter of 2016 resulting from changes in estimates for rebates and
discounts, and to a lesser extent increased demand. Revenue outside
the U.S. increased 6 percent, to $259.4
million, driven by increased volume and, to a lesser extent,
higher realized prices, partially offset by the unfavorable impact
of foreign exchange rates.
Cialis
For the first quarter of 2017, worldwide Cialis revenue
decreased 7 percent, to $533.6
million. U.S. revenue of Cialis was $296.7 million in the first quarter, an 8 percent
decrease compared with the first quarter of 2016, driven by
decreased demand. Revenue of Cialis outside the U.S. decreased 6
percent, to $236.9 million, driven by
decreased volume and, to a lesser extent, the unfavorable impact of
foreign exchange rates, partially offset by higher realized
prices.
Alimta
For the first quarter of 2017, Alimta generated worldwide
revenue of $489.9 million, which
decreased 13 percent compared with the first quarter of 2016. U.S.
revenue of Alimta decreased 14 percent, to $227.3 million, driven by decreased demand due to
competitive pressure. Revenue outside the U.S. decreased 13
percent, to $262.6 million, driven by
lower realized prices, the loss of exclusivity in several countries
and, to a lesser extent, the unfavorable impact of foreign exchange
rates.
Forteo
First-quarter 2017 worldwide revenue for Forteo was $347.5 million, a 9 percent increase compared
with the first quarter of 2016. U.S. revenue increased 20 percent,
to $177.7 million, driven by higher
realized prices and, to a lesser extent, wholesaler buying
patterns. Revenue outside the U.S. remained flat at $169.8 million, driven by lower realized
prices, offset by increased volume.
Humulin
Worldwide Humulin revenue for the first quarter of 2017
decreased 12 percent compared with the first quarter of 2016 to
$314.5 million. U.S. revenue
decreased 14 percent, to $205.4
million, driven by a change in the estimate in 2016 for a
government rebate, which increased revenue in that period, and to a
lesser extent, decreased demand. Revenue outside the U.S. decreased
6 percent, to $109.1 million,
driven by lower realized prices and, to a lesser extent, the
unfavorable impact of foreign exchange rates, partially offset by
increased volume.
Selected New Pharmaceutical Products
Trulicity
First-quarter 2017 worldwide Trulicity revenue was $372.9 million. U.S. revenue was $296.3 million, driven by growth in the
GLP-1 market and increased share of market for Trulicity. Revenue
outside the U.S. was $76.6 million,
primarily driven by uptake in Europe and Japan.
Cyramza
For the first quarter of 2017, worldwide Cyramza revenue was
$171.2 million, an increase of 31
percent compared with the first quarter of 2016. U.S. revenue was
$66.2 million, a decrease of 8
percent, driven by lower realized prices and, to a lesser extent,
decreased demand due to competitive pressure. Revenue outside the
U.S. was $105.1 million, an increase
of 77 percent, primarily due to strong volume growth in
Japan, partially offset by lower
realized prices.
Taltz
For the first quarter of 2017, Taltz, a treatment for
moderate-to-severe plaque psoriasis, generated worldwide revenue of
$96.6 million. U.S. revenue was
$87.8 million, an increase of
$28.4 million compared with the
fourth quarter of 2016, reflecting strong launch uptake.
Jardiance
The company's worldwide Jardiance revenue during the first
quarter of 2017 was $74.0 million, an
increase of 94 percent compared with the first quarter of 2016.
U.S. revenue increased 60 percent, to $47.7
million, driven by increased share of market for Jardiance
and growth in the SGLT2 class. Revenue outside the U.S. was
$26.2 million. Jardiance is part of
the company's alliance with Boehringer Ingelheim, and Lilly reports
as revenue a portion of Jardiance's gross margin.
Basaglar
For the first quarter of 2017, Basaglar generated worldwide
revenue of $46.0 million. U.S.
revenue was $22.0 million. Basaglar
is part of the company's alliance with Boehringer Ingelheim, and
Lilly reports as revenue total sales, with payments made to
Boehringer Ingelheim for its portion of the gross margin reported
as cost of sales.
Lartruvo
For the first quarter of 2017, Lartruvo, a treatment in
combination with doxorubicin for a subset of adult patients with
advanced soft tissue sarcoma, generated worldwide revenue of
$42.1 million. U.S. revenue was
$38.1 million, an increase of
$26.7 million compared with the
fourth quarter of 2016.
Olumiant
For the first quarter of 2017, Olumiant, a treatment for
moderate-to-severe rheumatoid arthritis, generated worldwide
revenue of $1.9 million, reflecting
initial sales in Germany.
Animal Health
In the first quarter of 2017, worldwide animal health revenue
totaled $769.4 million, an increase
of 2 percent compared with the first quarter of 2016.
Worldwide food animal revenue decreased 3 percent, to $508.1 million, driven by lower worldwide volume
due to continued economic pressure in the dairy market and customer
buying patterns. Worldwide companion animal revenue increased 13
percent, to $261.3 million, driven by
the inclusion of $40.8 million in
revenue from the acquisition of Boehringer Ingelheim Vetmedica's
U.S. feline, canine and rabies vaccine portfolio, partially offset
by worldwide competitive pressure.
2017 Financial Guidance
Earnings per share for 2017 are being revised to be in the range
of $2.60 to $2.70 on a reported
basis, due to severance costs incurred as a result of actions taken
to reduce the company's cost structure. Earnings per share for 2017
are being reaffirmed to be $4.05 to
$4.15 on a non-GAAP basis.
|
2017
Expectations
|
% Change
from 2016
|
Earnings per share
(reported)
|
$2.60 to
$2.70
|
1% to
5%
|
Acquired in-process
research and development charge related to
the acquisition of CoLucid Pharmaceuticals
|
.81
|
|
Amortization of
intangible assets (1)
|
.44
|
|
Asset impairment,
restructuring and other special charges,
including Novartis Animal Health integration
costs
|
.17
|
|
Inventory step-up
costs associated with the acquisition of
Boehringer Ingelheim Vetmedica's U.S. feline, canine and
rabies
vaccines portfolio (1)
|
.02
|
|
Earnings per share
(non-GAAP)
|
$4.05 to
$4.15
|
15% to
18%
|
(1) Subject to
acquisition accounting adjustments
|
|
|
Numbers may not add
due to rounding
|
|
|
The company still anticipates 2017 revenue between $21.8 billion and $22.3 billion. Excluding the
impact of foreign exchange rates, the company expects revenue
growth from animal health products and a number of established
pharmaceutical products including Trajenta®, Forteo and
Humalog, as well as higher revenue from new products including
Trulicity, Taltz, Basaglar, Cyramza, Jardiance and Lartruvo.
Marketing, selling and administrative expenses are still
expected to be in the range of $6.4 billion
to $6.6 billion. Research and development expenses are
still expected to be in the range of $4.9
billion to $5.1 billion.
The 2017 tax rate is still expected to be approximately 24.5
percent on a reported basis and 22.0 percent on a non-GAAP
basis.
The following table summarizes the company's 2017 financial
guidance:
|
2017
Guidance
|
|
Prior
|
|
Revised
|
Revenue
|
$21.8 to $22.3
billion
|
|
Unchanged
|
|
|
|
|
Gross Margin % of
Revenue (reported)
|
Approx.
73.5%
|
|
Unchanged
|
Gross Margin % of
Revenue (non-GAAP)
|
Approx.
77.0%
|
|
Unchanged
|
|
|
|
|
Marketing, Selling
& Administrative
|
$6.4 to $6.6
billion
|
|
Unchanged
|
|
|
|
|
Research &
Development
|
$4.9 to $5.1
billion
|
|
Unchanged
|
|
|
|
|
Other
Income/(Expense)
|
$0 to $100
million
|
|
Unchanged
|
|
|
|
|
Tax Rate
(reported)
|
Approx.
24.5%
|
|
Unchanged
|
Tax Rate
(non-GAAP)
|
Approx.
22.0%
|
|
Unchanged
|
|
|
|
|
Earnings per Share
(reported)
|
$2.69 to
$2.79
|
|
$2.60 to
$2.70
|
Earnings per Share
(non-GAAP)
|
$4.05 to
$4.15
|
|
Unchanged
|
|
|
|
|
Capital
Expenditures
|
Approx. $1.2
billion
|
|
Unchanged
|
|
|
|
|
Non-GAAP adjustments
are consistent with the earnings per share table above.
|
Webcast of Conference Call
As previously announced, investors and the general public can
access a live webcast of the first-quarter 2017 financial results
conference call through a link on Lilly's website at
https://investor.lilly.com/events.cfm. The conference call will
begin at 9 a.m. Eastern Time (ET) on
Tuesday, April 25, 2017, and will be
available for replay via the website.
Lilly is a global healthcare leader that unites caring with
discovery to make life better for people around the world. We were
founded more than a century ago by a man committed to creating
high-quality medicines that meet real needs, and today we remain
true to that mission in all our work. Across the globe, Lilly
employees work to discover and bring life-changing medicines to
those who need them, improve the understanding and management of
disease, and give back to communities through philanthropy and
volunteerism. To learn more about Lilly, please visit us at
www.lilly.com and http://newsroom.lilly.com/social-channels.
F-LLY
This press release contains management's current intentions and
expectations for the future, all of which are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. The
words "estimate," "project," "intend," "expect," "believe,"
"target," "anticipate," and similar expressions are intended to
identify forward-looking statements. Actual results may differ
materially from these forward-looking statements due to various
factors. There are significant risks and uncertainties in
pharmaceutical research and development. There can be no guarantees
that pipeline products will succeed in clinical testing, will
receive the necessary clinical and manufacturing regulatory
approvals, or will prove to be commercially successful. The
company's results may also be affected by such factors as the
timing of anticipated regulatory approvals and launches of new
products; market uptake of recently launched products; competitive
developments affecting current products; the expiration of
intellectual property protection for certain of the company's
products; the company's ability to protect and enforce patents and
other intellectual property; the impact of governmental actions
regarding pricing, importation, and reimbursement for
pharmaceuticals, including U.S. health care reform; regulatory
compliance problems or government investigations; regulatory
actions regarding currently marketed products; unexpected safety or
efficacy concerns associated with the company's products; issues
with product supply stemming from manufacturing difficulties or
disruptions; regulatory changes or other developments; changes in
patent law or regulations related to data-package exclusivity;
litigation involving current or future products; the extent to
which third-party indemnification obligations relating to product
liability litigation and similar matters will be performed;
unauthorized disclosure of trade secrets or other confidential data
stored in the company's information systems and networks; changes
in tax law and regulations; changes in inflation, interest rates,
and foreign currency exchange rates; asset impairments and
restructuring charges; changes in accounting standards promulgated
by the Financial Accounting Standards Board and the U.S. Securities
and Exchange Commission (SEC); acquisitions and business
development transactions and related integration considerations;
and the impact of exchange rates and global macroeconomic
conditions, including the effect of the pending exit of the
United Kingdom from the European
Union. For additional information about the factors that could
cause actual results to differ materially from forward-looking
statements, please see the company's latest Form 10-K filed with
the SEC. You should not place undue reliance on forward-looking
statements, which speak only as of the date of this release. Except
as is required by law, the company expressly disclaims any
obligation to publicly release any revisions to forward-looking
statements to reflect events after the date of this release.
|
Alimta®
(pemetrexed disodium, Lilly)
|
Basaglar®
(insulin glargine injection, Lilly)
|
Cialis®
(tadalafil, Lilly)
|
Cymbalta®
(duloxetine hydrochloride, Lilly)
|
Cyramza®
(ramucirumab, Lilly)
|
Effient®
(prasugrel, Lilly)
|
Erbitux® (cetuximab,
Lilly)
|
Forteo®
(teriparatide of recombinant DNA origin injection,
Lilly)
|
Glyxambi®
(empagliflozin/linagliptin, Boehringer Ingelheim)
|
Humalog®
(insulin lispro injection of recombinant DNA origin,
Lilly)
|
Humulin®
(human insulin of recombinant DNA origin, Lilly)
|
Jardiance®
(empagliflozin, Boehringer Ingelheim)
|
Lartruvo™
(olaratumab, Lilly)
|
Olumiant®
(baricitinib, Lilly)
|
Portrazza®
(necitumumab, Lilly)
|
Stelara®
(ustekinumab, Janssen Biotech)
|
Strattera®
(atomoxetine hydrochloride, Lilly)
|
Synjardy®
(empagliflozin/metformin, Boehringer Ingelheim)
|
Taltz®
(ixekizumab, Lilly)
|
Trajenta® (linagliptin, Boehringer
Ingelheim)
|
Trulicity®
(dulaglutide, Lilly)
|
Zyprexa® (olanzapine,
Lilly)
|
|
Eli Lilly and Company
Employment Information
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
Worldwide
Employees
|
42,065
|
|
41,975
|
Eli Lilly and
Company
|
Operating
Results (Unaudited) – REPORTED
|
(Dollars in millions,
except per share data)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2017
|
|
|
2016
|
|
% Chg.
|
|
|
|
|
|
|
Revenue
|
$
|
5,228.3
|
|
$
|
4,865.1
|
|
7%
|
|
|
|
|
|
|
Cost of
sales
|
|
1,327.7
|
|
|
1,323.0
|
|
0%
|
Research and
development
|
|
1,238.3
|
|
|
1,221.0
|
|
1%
|
Marketing, selling
and administrative
|
|
1,544.7
|
|
|
1,473.9
|
|
5%
|
Acquired in-process
research
and development
|
|
857.6
|
|
|
—
|
|
NM
|
Asset impairment,
restructuring and
other special charges
|
|
213.9
|
|
|
131.4
|
|
63%
|
|
|
|
|
|
|
Operating
income
|
|
46.1
|
|
|
715.8
|
|
(94)%
|
|
|
|
|
|
|
Net interest income
(expense)
|
|
(14.0)
|
|
|
(19.2)
|
|
|
Net other income
(expense)
|
|
29.1
|
|
|
(129.8)
|
|
|
Other income
(expense)
|
|
15.1
|
|
|
(149.0)
|
|
NM
|
|
|
|
|
|
|
Income before income
taxes
|
|
61.2
|
|
|
566.8
|
|
(89)%
|
Income
taxes
|
|
172.0
|
|
|
126.7
|
|
36%
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(110.8)
|
|
$
|
440.1
|
|
NM
|
|
|
|
|
|
|
Earnings (loss) per
share – diluted
|
$
|
(0.10)
|
|
$
|
0.41
|
|
NM
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
0.52
|
|
$
|
0.51
|
|
2%
|
Weighted-average
shares
outstanding (thousands) – diluted
|
|
1,056,306
|
|
|
1,063,075
|
|
|
|
NM – not
meaningful
|
Eli Lilly and
Company
|
Reconciliation of
GAAP Reported to Selected Non-GAAP Adjusted Information
(Unaudited)(a)
|
(Dollars in millions,
except per share data)
|
|
|
Three Months
Ended
March 31,
2017
|
|
Three Months
Ended
March 31, 2016
|
|
GAAP
Reported
|
Adjustments(c)
|
Non-GAAP
Adjusted
|
|
GAAP
Reported
|
Adjustments(d)
|
Non-GAAP
Adjusted
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
$
|
1,327.7
|
|
$
|
(184.7)
|
|
$
|
1,143.0
|
|
$
|
1,323.0
|
|
$
|
(170.6)
|
|
$
|
1,152.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses(b)
|
|
2,783.0
|
|
|
(1.8)
|
|
|
2,781.2
|
|
|
2,694.9
|
|
|
(1.9)
|
|
|
2,693.0
|
Acquired
in-process
research and
development
|
|
857.6
|
|
|
(857.6)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Asset impairment,
restructuring and other
special charges
|
|
213.9
|
|
|
(213.9)
|
|
|
—
|
|
|
131.4
|
|
|
(131.4)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
15.1
|
|
|
—
|
|
|
15.1
|
|
|
(149.0)
|
|
|
203.9
|
|
|
54.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
172.0
|
|
|
107.6
|
|
|
279.6
|
|
|
126.7
|
|
|
65.6
|
|
|
192.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(110.8)
|
|
$
|
1,150.4
|
|
$
|
1,039.6
|
|
$
|
440.1
|
|
$
|
442.2
|
|
$
|
882.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share –
diluted
|
$
|
(0.10)
|
|
$
|
1.09
|
|
$
|
0.98
|
|
$
|
0.41
|
|
$
|
0.42
|
|
$
|
0.83
|
Numbers may not add
due to rounding.
|
The table above
reflects only line items with non-GAAP adjustments.
|
(a)
|
The company uses
non-GAAP financial measures that differ from financial statements
reported in conformity with U.S. generally accepted accounting
principles (GAAP). The company's non-GAAP measures adjust reported
results to exclude amortization of intangibles and items that are
typically highly variable, difficult to predict, and/or of a size
that could have a substantial impact on the company's reported
operations for a period. The company believes that these non-GAAP
measures provide useful information to investors. Among other
things, they may help investors evaluate the company's ongoing
operations. They can assist in making meaningful period-over-period
comparisons and in identifying operating trends that would
otherwise be masked or distorted by the items subject to the
adjustments. Management uses these non-GAAP measures internally to
evaluate the performance of the business, including to allocate
resources and to evaluate results relative to incentive
compensation targets. Investors should consider these non-GAAP
measures in addition to, not as a substitute for or superior to,
measures of financial performance prepared in accordance with
GAAP.
|
(b)
|
Operating expenses
include research and development and marketing, selling and
administrative expenses.
|
(c)
|
Adjustments to
certain GAAP reported measures for the three months ended March 31,
2017, include the following:
|
(Dollars in millions,
except per
share data)
|
Amortization(i)
|
IPR&D(ii)
|
Inventory
step-up(iii)
|
Other
specified
items(iv)
|
Total
Adjustments
|
Cost of
sales
|
$
|
(174.3)
|
|
$
|
—
|
|
$
|
(10.4)
|
|
$
|
—
|
|
$
|
(184.7)
|
|
|
|
|
|
|
|
Operating
expenses
|
(1.8)
|
|
—
|
|
—
|
|
—
|
|
(1.8)
|
|
Acquired in-process
research
and development
|
—
|
|
(857.6)
|
|
—
|
|
—
|
|
(857.6)
|
|
Asset impairment,
restructuring and other
special charges
|
—
|
|
—
|
|
—
|
|
(213.9)
|
|
(213.9)
|
|
|
|
|
|
|
|
Income
taxes
|
55.2
|
|
—
|
|
3.6
|
|
48.7
|
|
107.6
|
|
|
|
|
|
|
|
Net income
|
$
|
120.8
|
|
$
|
857.6
|
|
$
|
6.7
|
|
$
|
165.2
|
|
$
|
1,150.4
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.11
|
|
$
|
0.81
|
|
$
|
0.01
|
|
$
|
0.16
|
|
$
|
1.09
|
|
Numbers may not
add due to rounding.
|
The table above
reflects only line items with non-GAAP adjustments.
|
i.
|
Exclude amortization
of intangibles primarily associated with costs of marketed products
acquired or licensed from third parties.
|
ii.
|
Exclude costs
associated with upfront payments for acquired in-process research
and development projects acquired in a transaction other than a
business combination. These costs are related to the
acquisition of CoLucid Pharmaceuticals.
|
iii.
|
Exclude inventory
step-up costs associated with the acquisition of Boehringer
Ingelheim Vetmedica's U.S. feline, canine and rabies vaccine
portfolio.
|
iv.
|
Exclude charges
related to severance costs incurred as a result of actions taken to
reduce the company's cost structure, as well as integration costs
related to the acquisition of Novartis Animal Health.
|
(d)
|
Adjustments to
certain GAAP reported measures for the three months ended March 31,
2016, include the following:
|
(Dollars in millions,
except per share data)
|
Amortization(i)
|
Venezuela
charge(ii)
|
Other
specified
items(iii)
|
Total
Adjustments
|
Cost of
sales
|
$
|
(170.6)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(170.6)
|
|
|
|
|
|
|
Operating
expenses
|
(1.9)
|
|
—
|
|
—
|
|
(1.9)
|
|
Asset impairment,
restructuring and other special charges
|
—
|
|
—
|
|
(131.4)
|
|
(131.4)
|
|
|
|
|
|
|
Other income
(expense)
|
—
|
|
203.9
|
|
—
|
|
203.9
|
|
|
|
|
|
|
Income
taxes
|
54.1
|
|
—
|
|
11.5
|
|
65.6
|
|
|
|
|
|
|
Net income
|
$
|
118.4
|
|
$
|
203.9
|
|
$
|
119.9
|
|
$
|
442.2
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.11
|
|
$
|
0.19
|
|
$
|
0.11
|
|
$
|
0.42
|
|
Numbers may not add
due to rounding.
|
The table above
reflects only line items with non-GAAP adjustments.
|
i.
|
Exclude amortization
of intangibles primarily associated with costs of marketed products
acquired or licensed from third parties.
|
ii.
|
Exclude charge
related to the impact of the Venezuelan financial
crisis.
|
iii.
|
Exclude charges
associated with asset impairments related to the closure of an
animal health manufacturing facility in Ireland and integration
costs for Novartis Animal Health.
|
Refer to:
Lauren Zierke;
lauren_zierke@lilly.com; (317) 277-6524 (Media)
Philip Johnson;
johnson_philip_l@lilly.com; (317) 655-6874 (Investors)
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lilly-reports-first-quarter-2017-results-300445053.html
SOURCE Eli Lilly and Company