INDIANAPOLIS, Dec. 13, 2017 /PRNewswire/ -- Eli Lilly and
Company (NYSE: LLY) today announced its 2018 financial guidance,
including low-single-digit revenue growth driven by volume from
recently launched pharmaceutical products. The company also
highlighted key events for the upcoming year, including continued
progress on its pipeline.
"Lilly is in the early stages of a growth period driven by
revenue from recently launched products, including Trulicity,
Taltz, Basaglar, Jardiance, Verzenio, Cyramza, Olumiant and
Lartruvo. Additionally, progress on our productivity agenda is
expected to further expand our operating margin," said David A. Ricks, Lilly's chairman and chief
executive officer. "Looking to the future, the potential of our
pipeline remains strong, including new medicines in development for
the treatment of migraine, rheumatoid arthritis, pain, cancer and
diabetes, as well as additional indications for many of our
recently launched products."
"In 2018, we are expecting continued progress towards our
financial objectives. We recently announced an 8 percent increase
in our dividend based on revenue and margin growth and the
advancement of our pipeline," said Joshua
Smiley, senior vice president and Lilly's incoming chief
financial officer.
Smiley continued, "We are confident in our future growth
prospects and have reaffirmed our expectation of least 5 percent
average annual revenue growth from 2015 to 2020, on a constant
currency basis. In addition, we expect operating margin as a
percent of revenue to be at least 30 percent in 2020, excluding the
effect of foreign exchange on international inventories sold."
2017 Financial Guidance
Earnings per share in 2017 are being decreased to be in the
range of $1.56 to $1.66 on a reported basis. This revision is
primarily due to changes in estimates related to asset impairment,
restructuring and other special charges.
Non-GAAP earnings per share in 2017 are still expected to be in
the range of $4.15 to $4.25.
|
2017
Expectations
|
|
% Change
from 2016
|
|
Earnings per share
(reported)
|
$1.56 to
$1.66
|
|
(40)% to
(36)%
|
|
Asset impairment,
restructuring and other special charges,
including the U.S. voluntary early
retirement program,
global severance, facility closures
and Novartis Animal
Health integration costs
|
1.15
|
|
|
|
Acquired in-process
research and development charges
related to the acquisition of CoLucid
Pharmaceuticals and
the collaborations with Nektar
Therapeutics,
KeyBioscience and CureVac
|
.97
|
|
|
|
Amortization of
intangible assets(1)
|
.44
|
|
|
|
Inventory step-up
costs associated with the acquisition of
Boehringer Ingelheim Vetmedica's U.S.
feline, canine and
rabies vaccines portfolio
(1)
|
.03
|
|
|
|
Earnings per share
(non-GAAP)
|
$4.15 to
$4.25
|
|
18% to
21%
|
|
(1) Subject to
acquisition accounting adjustments
|
|
|
|
|
Numbers may not add
due to rounding
|
|
|
|
|
|
|
|
|
|
The following table summarizes the company's 2017 financial
guidance.
|
2017
Guidance
|
|
Prior
|
|
Revised
|
Revenue
|
$22.4 to $22.7
billion
|
|
Unchanged
|
|
|
|
|
Gross Margin % of
Revenue (reported)
|
Approx.
72.5%
|
|
Unchanged
|
Gross Margin % of
Revenue (non-GAAP)
|
Approx.
76.0%
|
|
Unchanged
|
|
|
|
|
Marketing, Selling
& Administrative
|
$6.4 to $6.6
billion
|
|
Unchanged
|
|
|
|
|
Research &
Development
|
$5.1 to $5.2
billion
|
|
Unchanged
|
|
|
|
|
Other
Income/(Expense)
|
$0 to $100
million
|
|
Unchanged
|
Tax Rate
(reported)
|
Approx.
20.0%
|
|
Approx.
22.5%
|
Tax Rate
(non-GAAP)
|
Approx.
21.0%
|
|
Unchanged
|
|
|
|
|
Earnings per Share
(reported)
|
$1.73 to
$1.83
|
|
$1.56 to
$1.66
|
Earnings per Share
(non-GAAP)
|
$4.15 to
$4.25
|
|
Unchanged
|
|
|
|
|
Capital
Expenditures
|
Approx. $1.1
billion
|
|
Unchanged
|
|
|
|
|
Non-GAAP adjustments
are consistent with the earnings per share table above.
|
2018 Financial Guidance
Earnings per share for 2018 are expected to be in the range of
$4.24 to $4.34 on a reported basis and $4.60 to $4.70 on a
non-GAAP basis. Non-GAAP earnings per share for 2018 exclude
amortization of intangible assets.
|
2018
Expectations
|
|
Earnings per share
(reported)
|
$4.24 to
$4.34
|
|
Amortization of
intangible assets
|
.37
|
|
|
Earnings per share
(non-GAAP)
|
$4.60 to
$4.70
|
|
Numbers may not add
due to rounding
|
|
|
|
|
The company anticipates 2018 revenue between $23.0 billion and $23.5
billion. The company expects revenue growth driven by new
products including Trulicity®, Taltz®,
Basaglar®, Jardiance®, VerzenioTM,
Cyramza®, Olumiant® and
LartruvoTM.
Other income (expense) is expected to be income between
$75 million and $175 million on a reported and non-GAAP basis,
which includes the adoption of a new accounting standard requiring
the company to include certain components of retirement benefits in
other income (expense). This new accounting standard will result in
higher cost of sales and operating expenses, which will be offset
by higher other income.
The following table summarizes the company's 2018 financial
guidance.
|
2018
Guidance
|
|
Reported
|
|
Non-GAAP
|
Revenue
|
$23.0 to $23.5
billion
|
|
$23.0 to $23.5
billion
|
|
|
|
|
Gross Margin % of
Revenue
|
Approx.
73.0%
|
|
Approx.
75.0%
|
|
|
|
|
Marketing, Selling
& Administrative
|
$6.1 to $6.4
billion
|
|
$6.1 to $6.4
billion
|
|
|
|
|
Research &
Development
|
$5.0 to $5.2
billion
|
|
$5.0 to $5.2
billion
|
|
|
|
|
Other
Income/(Expense)
|
$75 to $175
million
|
|
$75 to $175
million
|
|
|
|
|
Tax Rate
|
Approx.
20.5%
|
|
Approx.
21.5%
|
|
|
|
|
Earnings per
Share
|
$4.24 to
$4.34
|
|
$4.60 to
$4.70
|
|
|
|
|
Capital
Expenditures
|
Approx. $1.2
billion
|
|
Approx. $1.2
billion
|
|
|
|
|
Non-GAAP adjustments
are consistent with the earnings per share table above.
|
|
|
|
|
Webcast of Conference Call and Investor Materials
As previously announced, investors and the general public can
access a live webcast of the 2018 financial guidance conference
call and investor materials through a link on Lilly's website at
www.investor.lilly.com. The conference call will be held today
beginning at 10:00 a.m. Eastern time
(ET) 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
voluntarism. 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 and
subsequent Form 10-Qs 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.
Basaglar® (insulin glargine injection, Lilly)
Cyramza® (ramucirumab, Lilly)
Jardiance® (empagliflozin, Boehringer Ingelheim)
Lartruvo™ (olaratumab, Lilly)
Olumiant® (baricitinib, Lilly)
Taltz® (ixekizumab, Lilly)
Trulicity® (dulaglutide, Lilly)
Verzenio™ (abemaciclib, Lilly)
Refer
to:
|
Lauren Zierke;
lauren_zierke@lilly.com; 317-277-6524 (Media)
|
|
Phil Johnson;
johnson_philip_l@lilly.com; 317-655-6874 (Investors)
|
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SOURCE Eli Lilly and Company