- Lilly expects to deliver strong financial and operational
performance in 2023, highlighted by volume-driven revenue growth;
potential launches for donanemab, mirikizumab, lebrikizumab and
pirtobrutinib; potential regulatory submissions for tirzepatide in
obesity; and numerous other anticipated pipeline advancements.
- Continued pipeline progress in 2023 includes expected
initiation of Phase 3 clinical trials for retatrutide (GGG
tri-agonist) in obesity and orforglipron (oral GLP-1 NPA) in type 2
diabetes and obesity, and key Phase 3 readouts, which include
donanemab for early Alzheimer's disease and mirikizumab for Crohn's
disease.
- 2023 revenue expected to be between $30.3 billion and $30.8
billion, driven by key growth products.
- 2023 EPS expected to be in the range of $7.65 to $7.85 on a
reported basis and $8.10 to
$8.30 on a non-GAAP basis.
- The company reaffirmed its 2022 financial guidance on both a
reported and non-GAAP basis.
- Fifth consecutive 15% annual increase in dividend for 2023,
doubling since 2018 and underscoring increasing confidence in the
company's outlook.
INDIANAPOLIS, Dec. 13,
2022 /PRNewswire/ -- Eli Lilly and Company (NYSE:
LLY) today announced its 2023 financial guidance, highlighted by
expected volume-based revenue growth and increased investments to
maximize future value. The company will review potential key events
for the upcoming year, including important data readouts for
several investigational medicines in its clinical pipeline and the
possibility of multiple regulatory submissions and approvals, in a
call with investors today.
"Lilly is exiting 2022 with momentum. Our approved and available
medicines are early in their life cycles and showed accelerated
growth during the year, led by a strong Mounjaro launch. In
addition, several of our late-stage medicines for serious diseases
were submitted for approval this year, and will hopefully launch in
2023," said David A. Ricks, Lilly's
chair and CEO. "We continue to innovate and are beginning new
pivotal studies for the next group of potential breakthrough
treatments. In the decade ahead, we are well-positioned to create
significant value for patients with challenging conditions, health
systems struggling to manage chronic disease, and of course, our
shareholders."
Anat Ashkenazi, Lilly's executive vice president and chief
financial officer, outlined the company's expectations for its
growth prospects: "We believe we have the potential to deliver
top-tier, volume-driven revenue growth through at least 2030 with
groundbreaking medicines. In addition to the tremendous on-going
launch of Mounjaro in type 2 diabetes and expected future
opportunities to treat obesity and obesity-related metabolic
outcomes with tirzepatide, we plan to invest in our four
significant potential new launches next year. With limited patent
expirations this decade, we believe these potential new medicines
and the continued scaling of our key growth products will fuel our
next wave of growth. Lilly is committed to maximizing long-term
value for stakeholders and we look forward to delivering further in
2023."
2022 Financial Guidance
The company reaffirmed its 2022 financial guidance on both a
reported and non-GAAP basis. The company's 2022 financial guidance
reflects adjustments shown in the reconciliation table below.
|
2022
Expectations
|
% Change vs
2021
|
Earnings per share
(reported)
|
$6.50 to
$6.65
|
6% to
9%
|
Net losses on
investments in equity securities(1)
|
.52
|
|
Amortization of
intangible assets
|
.51
|
|
Asset impairment,
restructuring, and other special charges
|
.17
|
|
Earnings per share
(non-GAAP)
|
$7.70 to
$7.85
|
4% to
6%
|
Numbers may not add due
to rounding
|
|
|
|
|
|
Acquired IPR&D and
development milestone charges(2)
|
$.67
|
|
|
|
|
(1) The
company's guidance does not reflect the impact of net gains or
losses on
investments in equity securities during Q4 2022.
|
|
|
|
(2) The
company's guidance does not include any acquired IPR&D or
development
milestone charges incurred during Q4 2022.
|
|
|
The company reaffirmed its 2022 financial guidance, as set forth
in the following table:
|
2022
Guidance
|
Revenue
|
$28.5 to $29.0
billion
|
|
|
Gross Margin % of
Revenue (reported)
|
Approx. 76%
|
Gross Margin % of
Revenue (non-GAAP)
|
Approx. 78%
|
|
|
Marketing, Selling
& Administrative
|
$6.4 to $6.6
billion
|
|
|
Research &
Development
|
$7.1 to $7.3
billion
|
|
|
Acquired IPR&D
& Development Milestones
|
Approx. $670
million
|
|
|
Other Income/(Expense)
(reported)
|
$(700) to $(600)
million
|
Other Income/(Expense)
(non-GAAP)
|
$(100) million to
$0
|
|
|
Tax Rate
|
Approx. 13% to
14%
|
|
|
Earnings per Share
(reported)
|
$6.50 to
$6.65
|
Earnings per Share
(non-GAAP)
|
$7.70 to
$7.85
|
|
|
Operating Margin %
(reported)
|
Approx. 26%
|
Operating Margin %
(non-GAAP)
|
Approx. 29%
|
|
|
Non-GAAP guidance
reflects adjustments presented in the earnings per share table
above.
|
2023 Financial Guidance
Earnings per share (EPS) for 2023 is expected to be in the range
of $7.65 to $7.85 on a reported basis and $8.10 to $8.30 on a
non-GAAP basis. The company's 2023 financial guidance reflects the
adjustment shown in the reconciliation table below.
|
2023
Expectations
|
Earnings per share
(reported)
|
$7.65 to
$7.85
|
Amortization of
intangible assets
|
.45
|
Earnings per share
(non-GAAP)
|
$8.10 to
$8.30
|
Numbers may not add due
to rounding.
|
|
The company's 2023
financial guidance does not include any impact from potential
or pending business development transactions or potential
development milestone
charges.
|
|
The company anticipates 2023 revenue between $30.3 billion and $30.8
billion, driven by volume increases from key growth
products. This growth is expected to be partially offset by lower
revenue for Alimta® due to its loss of patent
exclusivity, no anticipated COVID-19 antibody revenue, and the
continued negative impact of foreign exchange rates.
Gross margin as a percent of revenue for 2023 is expected to be
approximately 77% on a reported basis and approximately 79% on a
non-GAAP basis.
Marketing, selling and administrative expenses for 2023 are
expected to be in the range of $6.9
billion to $7.1 billion.
Research and development expenses are expected to be in the range
of $8.2 billion to $8.4 billion.
Consistent with 2022, the company is not including any potential
or pending acquired in-process research and development (IPR&D)
and development milestone charges in its initial 2023 guidance and
expects to update EPS guidance each quarter as acquired IPR&D
and development milestone charges are incurred.
Other income (expense) is expected to be expense in the range of
$100 million to $200 million on both a reported and non-GAAP
basis.
The 2023 effective tax rate is expected to be approximately 16%
on both a reported basis and non-GAAP basis. This assumes the
provision in the 2017 Tax Act that requires capitalization and
amortization of research and development expenses for tax purposes
is deferred or repealed by U.S. Congress this year, effective for
the full year 2022 as well as 2023. The tax rate increase also
includes the impact from recently enacted Puerto Rico legislation that will become
effective starting in 2023, as well as the impact from an expected
increase in the proportion of earnings in higher tax
jurisdictions.
The following table summarizes the company's 2023 financial
guidance:
|
2023
Guidance
|
Revenue
|
$30.3 to $30.8
billion
|
|
|
Gross Margin % of
Revenue (reported)
|
Approx. 77%
|
Gross Margin % of
Revenue (non-GAAP)
|
Approx. 79%
|
|
|
Marketing, Selling
& Administrative
|
$6.9 to $7.1
billion
|
|
|
Research &
Development
|
$8.2 to $8.4
billion
|
|
|
Other
Income/(Expense)
|
$(200) million to
$(100) million
|
|
|
Tax Rate
|
Approx. 16%
|
|
|
Earnings per Share
(reported)
|
$7.65 to
$7.85
|
Earnings per Share
(non-GAAP)
|
$8.10 to
$8.30
|
|
|
Non-GAAP guidance
reflects adjustments presented in 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 2023 financial guidance conference
call through a link on Lilly's website at
investor.lilly.com/webcasts-and-presentations. The conference call
will begin at 9 a.m. Eastern time
today and will be available for replay via the website.
Non-GAAP Financial Measures
The company uses non-GAAP financial measures that
differ from financial statements reported in conformity with U.S.
generally accepted accounting principles ("GAAP"), and this press
release and related materials includes a description of
certain non-GAAP items that may affect the company's
financial expectations for 2022 and 2023. The
company's non-GAAP financial 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 financial measures provide useful
information to investors in evaluating the company's performance.
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 financial measures internally to
evaluate the performance of the company's business, including to
allocate resources and to evaluate results relative to incentive
compensation targets. Investors should consider
these non-GAAP financial measures in addition to, not as
a substitute for or superior to, measures of financial performance
prepared in accordance with GAAP.
About Lilly
Lilly unites caring with discovery to create medicines that make
life better for people around the world. We've been pioneering
life-changing discoveries for nearly 150 years, and today our
medicines help more than 47 million people across the globe.
Harnessing the power of biotechnology, chemistry and genetic
medicine, our scientists are urgently advancing new discoveries to
solve some of the world's most significant health challenges,
redefining diabetes care, treating obesity and curtailing its most
devastating long-term effects, advancing the fight against
Alzheimer's disease, providing solutions to some of the most
debilitating immune system disorders, and transforming the most
difficult-to-treat cancers into manageable diseases. With each step
toward a healthier world, we're motivated by one thing: making life
better for millions more people. That includes delivering
innovative clinical trials that reflect the diversity of our world
and working to ensure our medicines are accessible and affordable.
To learn more, visit Lilly.com and
Lilly.com/newsroom. F-LLY
Cautionary Statement Regarding Forward-Looking
Statements
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", "forecast" and similar expressions are
intended to identify forward-looking statements. Actual results may
differ materially due to various factors. The following include
some but not all of the factors that could cause actual results or
events to differ materially from those anticipated, including the
impact of the evolving COVID-19 pandemic or any future pandemic,
epidemic, or similar public health threat and the global response
thereto; uncertainties related to the company's efforts to develop,
manufacture, and distribute potential treatments for COVID-19; the
significant costs and uncertainties in the pharmaceutical research
and development process, including with respect to the timing and
process of obtaining regulatory approvals; the impact and outcome
of acquisitions and business development transactions and related
integration costs; the expiration of intellectual property
protection for certain of the company's products and competition
from generic and/or biosimilar products; the company's ability to
protect and enforce patents and other intellectual property;
changes in patent law or regulations related to data package
exclusivity; competitive developments affecting current products
and the company's pipeline; market uptake of recently launched
products; information technology system inadequacies, breaches, or
operating failures; unauthorized access, disclosure,
misappropriation, or compromise of confidential information or
other data stored in the company's information technology systems,
networks, and facilities, or those of third parties with whom the
company shares its data; unexpected safety or efficacy concerns
associated with the company's products; litigation, investigations,
or other similar proceedings involving past, current, or future
products or commercial activities as the company is largely
self-insured; issues with product supply and regulatory approvals
stemming from manufacturing difficulties, disruptions, or
shortages, including as a result of demand, labor shortages,
third-party performance, or regulatory actions related to our
facilities; reliance on third-party relationships and outsourcing
arrangements; regulatory changes or other developments; regulatory
actions regarding currently marketed products; continued pricing
pressures and the impact of actions of governmental and private
payers affecting pricing of, reimbursement for, and access to
pharmaceuticals; devaluations in foreign currency exchange rates or
changes in interest rates, and inflation; changes in tax law, tax
rates, or events that differ from the company's assumptions related
to tax positions; asset impairments and restructuring charges; the
impact of global macroeconomic conditions, trade disruptions,
global disputes, unrest, war, or other costs, uncertainties and
risks related to engaging in business in foreign jurisdictions;
changes in accounting and reporting standards promulgated by the
Financial Accounting Standards Board and the Securities and
Exchange Commission (SEC); and regulatory compliance problems or
government investigations. In addition, the company may not be able
to reliably predict the impact of specified items in its 2023
guidance beyond the next 12 months, and the variability of factors
discussed in these forward-looking statements could have a
significant and unpredictable impact on the company's future GAAP
results. For additional information about the factors that could
cause actual results or events to differ materially from
forward-looking statements, please see the company's latest Form
10-K and subsequent Forms 8-K and 10-Q 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)
Mounjaro® (tirzepatide injection, Lilly)
Third party trademarks used herein are trademarks of their
respective owners.
Refer to:
|
Jordan Bishop;
jordan.bishop@lilly.com; (317) 473-5712 (Media)
|
|
Joe Fletcher;
jfletcher@lilly.com; (317) 296-2884 (Investors)
|
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SOURCE Eli Lilly and Company