Lilly Reports Fourth-Quarter 2022 Financial Results, Core Business Growth and Pipeline Advancements Support Strong Long-Term Outlook
- Revenue in Q4 2022 decreased 9%. Excluding COVID-19 antibodies, revenue in Q4 2022 increased 5%, or 10% on a constant currency basis, driven by volume growth of key growth products, partially offset by lower Alimta revenue. Excluding COVID-19 antibodies, total worldwide volume in Q4 2022 increased 13%.
- Pipeline advancements included FDA approval of Jaypirca for mantle cell lymphoma under the accelerated approval pathway and FDA and EMA acceptance of regulatory submissions for Jardiance for adults with chronic kidney disease. Additionally, the company initiated a rolling submission in the
U.S. for tirzepatide in obesity and the FDA granted Fast Track designation for tirzepatide in obstructive sleep apnea. - Key growth products - consisting of Verzenio, Mounjaro, Jardiance, Taltz, Trulicity, Retevmo, Emgality, Cyramza, Tyvyt and Olumiant - grew 21% and represented 70% of revenue in Q4 2022.
- Q4 2022 EPS increased 13% to
$2.14 on a reported basis and decreased 4% to$2.09 on a non-GAAP basis, both inclusive of$0.23 of acquired IPR&D and development milestone charges. - 2023 EPS guidance updated to be in the range of
$7.90 to$8.10 on a reported basis and$8.35 to$8.55 on a non-GAAP basis.
"2023 is an inflection point for
- The
U.S. Food and Drug Administration (FDA) approval of Jaypirca™ (pirtobrutinib) for adults with relapsed or refractory mantle cell lymphoma after at least two lines of systemic therapy, including a BTK inhibitor, under the accelerated approval pathway; - FDA issuance of a complete response letter for the accelerated approval submission of donanemab for early Alzheimer's disease;
- FDA and
European Medicines Agency acceptance of regulatory submissions for Jardiance® for adults with chronic kidney disease based on results from the EMPA-KIDNEY Phase 3 trial; - The initiation of a rolling submission in the
U.S. for tirzepatide in obesity and FDA Fast Track designation for tirzepatide in obstructive sleep apnea; - The announcement that Jardiance is the first SGLT2 inhibitor to show statistically significant reduction in blood sugar levels in children and adolescents with type 2 diabetes;
- Positive donanemab data from the first Phase 3 active comparator study in early Alzheimer's disease, TRAILBLAZER-ALZ 4;
- Plans to invest an additional
$450 million and create at least 100 new jobs to expand manufacturing capacity at the company'sResearch Triangle Park facility; - The acquisition of Akouos, Inc., which expands
Lilly 's efforts in genetic medicines to include Akouos's potential first-in-class adeno-associated viral gene therapies; - The fifth consecutive 15% annual increase in
Lilly 's quarterly dividend, doubling since 2018; - A collaboration with EVA Pharma to establish local manufacturing capabilities to supply low-cost insulin to at least 1 million people by 2030, mostly in
Africa ; and - An initiative with Direct Relief to expand cold chain capacity in
Africa ,Latin America , theCaribbean andSoutheast Asia .
For additional information on these and other important public announcements, visit the news section of
Financial Results
$ in millions, except per share data |
Fourth Quarter |
% |
||
2022 |
2021 |
Change |
||
Revenue |
|
|
(9) % |
|
Net Income – Reported |
1,937.7 |
1,726.1 |
12 % |
|
EPS – Reported |
2.14 |
1.90 |
13 % |
|
Net Income – Non-GAAP |
1,893.1 |
1,970.5 |
(4) % |
|
EPS – Non-GAAP |
2.09 |
2.17 |
(4) % |
|
A discussion of the non-GAAP financial measures is included under "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited)."
Fourth-Quarter Reported Results
In Q4 2022, worldwide revenue was
Revenue in the
Revenue outside the
Gross margin decreased 3% to
In Q4 2022, research and development expenses increased 5% to
Marketing, selling and administrative expenses increased 3% to
In Q4 2022, the company recognized acquired in-process research and development (IPR&D) and development milestone charges of
In Q4 2022, the company recognized asset impairment, restructuring and other special charges of
Operating income in Q4 2022 was
Other income (expense) was income of
The effective tax rate was 7.6% in Q4 2022 compared with 6.2% in Q4 2021. The effective tax rate in Q4 2022 reflects the favorable tax impact of the implementation of the provision in the Tax Cuts and Jobs Act (the 2017 Tax Act) that requires capitalization and amortization of research and development expenses for tax purposes starting in 2022 and a net discrete tax benefit, partially offset by the tax impact of the mix of earnings in higher tax jurisdictions. The effective tax rate in Q4 2021 reflected a net discrete tax benefit and the tax impact of acquired IPR&D and development milestone charges.
In Q4 2022, net income and earnings per share (EPS) were
Fourth-Quarter Non-GAAP Measures
On a non-GAAP basis, Q4 2022 gross margin decreased 3% to
Operating income on a non-GAAP basis decreased
The effective tax rate on a non-GAAP basis was 7.3% in Q4 2022 compared with 8.5% in Q4 2021. The lower effective tax rate for Q4 2022 reflects the favorable tax impact of the implementation of the 2017 Tax Act and a higher net discrete tax benefit compared to the same period in 2021, partially offset by the tax impact of the mix of earnings in higher tax jurisdictions.
On a non-GAAP basis, Q4 2022 net income and EPS were
For further detail on non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited)" table later in this press release.
Fourth Quarter |
||||
2022 |
2021 |
% Change |
||
Earnings per share (reported) |
$ 2.14 |
$ 1.90 |
13 % |
|
Amortization of intangible assets |
.11 |
.19 |
||
Asset impairment, restructuring and other special charges |
.03 |
.09 |
||
Net (gains) losses on investments in equity securities |
(.19) |
.06 |
||
Partial reversal of COVID-19 antibodies inventory charges |
— |
(.07) |
||
Earnings per share (non-GAAP) |
$ 2.09 |
$ 2.17 |
(4) % |
|
Numbers may not add due to rounding. |
||||
Acquired IPR&D and development milestone charges |
.23 |
.39 |
(41) % |
Selected Revenue Highlights
(Dollars in millions) |
Fourth Quarter |
Full Year |
|||||||||
Selected Products |
2022 |
2021 |
% Change |
2022 |
2021 |
% Change |
|||||
Trulicity |
|
|
3 % |
|
|
15 % |
|||||
Verzenio |
808.0 |
404.1 |
100 % |
2,483.5 |
1,349.9 |
84 % |
|||||
Taltz |
707.8 |
647.4 |
9 % |
2,482.0 |
2,212.8 |
12 % |
|||||
Jardiance(a) |
612.3 |
431.9 |
42 % |
2,066.0 |
1,490.8 |
39 % |
|||||
Humalog(b) |
548.3 |
601.7 |
(9) % |
2,060.6 |
2,453.0 |
(16) % |
|||||
COVID-19 antibodies(c) |
38.0 |
1,063.1 |
(96) % |
2,023.5 |
2,239.3 |
(10) % |
|||||
Humulin® |
234.0 |
298.8 |
(22) % |
1,019.4 |
1,222.6 |
(17) % |
|||||
Cyramza |
277.8 |
270.4 |
3 % |
971.4 |
1,033.0 |
(6) % |
|||||
Alimta |
236.6 |
434.9 |
(46) % |
927.7 |
2,061.4 |
(55) % |
|||||
Olumiant(d) |
205.8 |
306.0 |
(33) % |
830.5 |
1,115.1 |
(26) % |
|||||
Basaglar® |
201.7 |
242.4 |
(17) % |
760.4 |
892.5 |
(15) % |
|||||
Emgality |
175.6 |
161.5 |
9 % |
650.9 |
577.2 |
13 % |
|||||
Forteo® |
160.0 |
184.0 |
(13) % |
613.1 |
801.9 |
(24) % |
|||||
Mounjaro |
279.2 |
— |
NM |
482.5 |
— |
NM |
|||||
Tyvyt |
57.5 |
77.8 |
(26) % |
293.3 |
418.1 |
(30) % |
|||||
Retevmo |
64.6 |
38.6 |
67 % |
191.9 |
114.7 |
67 % |
|||||
Total Revenue |
7,301.8 |
7,999.9 |
(9) % |
28,541.4 |
28,318.4 |
1 % |
|||||
(a) Jardiance includes Glyxambi®, Synjardy® and Trijardy® XR (b) Humalog includes Insulin Lispro (c) COVID-19 antibodies include sales for bamlanivimab administered alone, for bamlanivimab and etesevimab (d) Olumiant includes sales of baricitinib that were made pursuant to EUA or similar regulatory authorizations NM – not meaningful |
Trulicity
For Q4 2022, worldwide Trulicity revenue was
Verzenio
For Q4 2022, worldwide Verzenio revenue increased 100% compared with Q4 2021 to
Taltz
For Q4 2022, worldwide Taltz revenue increased 9% compared with Q4 2021 to
Jardiance
The company's worldwide Jardiance revenue for Q4 2022 was
Jardiance is part of the company's alliance with
Humalog
For Q4 2022, worldwide Humalog revenue decreased 9% compared with Q4 2021 to
Alimta
For Q4 2022, worldwide Alimta revenue decreased 46% compared with Q4 2021 to
The company expects continued volume and revenue decline for Alimta as a result of generic competition due to the loss of patent exclusivity in major markets.
Olumiant
For Q4 2022, worldwide Olumiant revenue decreased 33% compared with Q4 2021 to
Emgality
For Q4 2022, Emgality generated worldwide revenue of
Mounjaro
For Q4 2022, worldwide Mounjaro revenue was
Tyvyt
For Q4 2022, the company's Tyvyt revenue in
Tyvyt is part of the company's alliance with Innovent.
2023 Financial Guidance
The company has updated its tax rate and EPS guidance and reaffirmed all other elements of its 2023 financial guidance. The previous tax rate guidance of approximately 16% for 2023 assumed deferral or repeal of the 2017 Tax Act provision that requires capitalization of research and development expenses. Such a deferral or repeal did not occur in 2022. Given the uncertainty as to whether any change to this provision will be enacted in 2023, the company has updated the tax rate guidance to be approximately 13% and 2023 EPS guidance has been increased to the range of
2023 Expectations |
|
Earnings per share (reported) |
|
Amortization of intangible assets |
.45 |
Earnings per share (non-GAAP) |
|
Numbers may not add due to rounding |
|
The company's 2023 financial guidance does not include any acquired IPR&D and |
|
The following table summarizes the company's updated 2023 financial guidance:
2023 Guidance |
|||
Prior |
Updated |
||
Revenue |
|
Unchanged |
|
Gross Margin % of Revenue (reported) |
Approx. 77% |
Unchanged |
|
Gross Margin % of Revenue (non-GAAP) |
Approx. 79% |
Unchanged |
|
Marketing, Selling & Administrative |
|
Unchanged |
|
Research & Development |
|
Unchanged |
|
Other Income/(Expense) |
|
Unchanged |
|
Tax Rate |
Approx. 16% |
Approx. 13% |
|
Earnings per Share (reported) |
|
|
|
Earnings per Share (non-GAAP) |
|
|
|
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 Q4 2022 financial results conference call through a link on
Non-GAAP Financial Measures
Certain financial information for 2022 and 2021 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
About
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" 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 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; the impact of global macroeconomic conditions, trade disruptions, disputes, unrest, war, regional dependencies, or other costs, uncertainties and risks related to engaging in business globally; 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 unpredictability and variability in demand, labor shortages, third-party performance, quality, or regulatory actions related to our facilities; dependence on certain products for a significant percentage of our total revenue; reliance on third-party relationships and outsourcing arrangements; the impact of public health outbreaks, epidemics, or pandemics, such as the COVID-19 pandemic; regulatory changes or other developments; regulatory actions regarding operations and 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; changes in accounting and reporting standards promulgated by the
Alimta® (pemetrexed disodium,
Basaglar® (insulin glargine injection,
Cyramza® (ramucirumab,
Emgality® (galcanezumab-gnlm,
Forteo® (teriparatide of recombinant DNA origin injection,
Glyxambi® (empagliflozin/linagliptin,
Humalog® (insulin lispro injection of recombinant DNA origin,
Humulin® (human insulin of recombinant DNA origin,
Jardiance® (empagliflozin,
Jaypirca™ (pirtobrutinib,
Mounjaro® (tirzepatide injection,
Olumiant® (baricitinib,
Qbrexza® (glycopyrronium cloth,
Retevmo® (selpercatinib,
Synjardy® (empagliflozin/metformin,
Taltz® (ixekizumab,
Trijardy® XR (empagliflozin/linagliptin/metformin hydrochloride extended release tablets,
Trulicity® (dulaglutide,
Tyvyt® (sintilimab injection, Innovent)
Verzenio® (abemaciclib,
Third party trademarks used herein are trademarks of their respective owners.
Operating Results (Unaudited) – REPORTED (Dollars in millions, except per share data) |
||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
|
|||||||||||
2022 |
2021 |
% Chg. |
2022 |
2021 |
% Chg. |
|||||||
Revenue |
$ |
7,301.8 |
$ |
7,999.9 |
(9) % |
$ |
28,541.4 |
$ |
28,318.4 |
1 % |
||
Cost of sales |
1,548.1 |
2,050.2 |
(24) % |
6,629.8 |
7,312.8 |
(9) % |
||||||
Research and development |
1,995.9 |
1,898.3 |
5 % |
7,190.8 |
6,930.7 |
4 % |
||||||
Marketing, selling and administrative |
1,643.2 |
1,592.0 |
3 % |
6,440.4 |
6,431.6 |
— % |
||||||
Acquired IPR&D and development |
240.1 |
437.7 |
(45) % |
908.5 |
970.1 |
(6) % |
||||||
Asset impairment, restructuring and |
38.1 |
104.5 |
(64) % |
244.6 |
316.1 |
(23) % |
||||||
Operating income |
1,836.4 |
1,917.2 |
(4) % |
7,127.3 |
6,357.1 |
12 % |
||||||
Net interest income (expense) |
(58.5) |
(74.0) |
(268.8) |
(314.4) |
||||||||
Net other income (expense) |
318.5 |
(3.3) |
(52.1) |
112.8 |
||||||||
Other income (expense) |
260.0 |
(77.3) |
NM |
(320.9) |
(201.6) |
59 % |
||||||
Income before income taxes |
2,096.4 |
1,839.9 |
14 % |
6,806.4 |
6,155.5 |
11 % |
||||||
Income tax expense |
158.7 |
113.8 |
39 % |
561.6 |
573.8 |
(2) % |
||||||
Net income |
$ |
1,937.7 |
$ |
1,726.1 |
12 % |
$ |
6,244.8 |
$ |
5,581.7 |
12 % |
||
Earnings per share - diluted |
$ |
2.14 |
$ |
1.90 |
13 % |
$ |
6.90 |
$ |
6.12 |
13 % |
||
Dividends paid per share |
$ |
.98 |
.85 |
15 % |
$ |
3.92 |
$ |
3.40 |
15 % |
|||
Weighted-average shares outstanding |
904,732 |
909,555 |
904,619 |
911,681 |
NM – not meaningful |
|
||||||||||||
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited) |
||||||||||||
(Dollars in millions, except per share data) |
||||||||||||
Three Months Ended |
Three Months Ended |
|||||||||||
GAAP |
Adjustments(b) |
Non-GAAP |
GAAP |
Adjustments(c) |
Non-GAAP |
|||||||
Cost of sales |
$ |
1,548.1 |
$ |
(124.1) |
$ |
1,424.0 |
$ |
2,050.2 |
$ |
(137.4) |
$ |
1,912.8 |
Asset impairment, |
38.1 |
(38.1) |
— |
104.5 |
(104.5) |
— |
||||||
Other income (expense) |
260.0 |
(216.5) |
43.5 |
(77.3) |
70.6 |
(6.7) |
||||||
Income tax expense |
158.7 |
(9.7) |
149.0 |
113.8 |
68.1 |
181.9 |
||||||
Net income |
1,937.7 |
(44.6) |
1,893.1 |
1,726.1 |
244.4 |
1,970.5 |
||||||
Earnings per share - diluted |
2.14 |
(0.05) |
2.09 |
1.90 |
0.27 |
2.17 |
||||||
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 |
(b) |
Adjustments to certain GAAP reported measures for the three months ended |
(Dollars in millions, except per share data) |
Amortization(i) |
Equity |
Other specified |
Total |
Cost of sales |
$ (124.1) |
$ — |
$ — |
(124.1) |
Asset impairment, restructuring and other |
— |
— |
(38.1) |
(38.1) |
Other income (expense) |
— |
(216.5) |
— |
(216.5) |
Income tax expense |
25.7 |
(43.7) |
8.3 |
(9.7) |
Net income |
98.4 |
(172.8) |
29.8 |
(44.6) |
Earnings per share - diluted |
0.11 |
(0.19) |
0.03 |
(0.05) |
Numbers may not add due to rounding.
The table above reflects only line items with non-GAAP adjustments.
- Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties.
- Exclude net gains on investments in equity securities.
- Exclude primarily the asset impairment, restructuring and other special charges primarily related to acquisition and integration costs associated with closing of the acquisition of Akouos, Inc.
(c) |
Adjustments to certain GAAP reported measures for the three months ended |
(Dollars in millions, except per share data) |
Amortization (i) |
Equity |
Other specified |
Total |
Cost of sales |
$ (219.9) |
$ — |
$ 82.5 |
(137.4) |
Asset impairment, restructuring and other |
— |
— |
(104.5) |
(104.5) |
Other income (expense) |
— |
70.6 |
— |
70.6 |
Income tax expense |
46.0 |
14.5 |
7.6 |
68.1 |
Net income |
173.9 |
56.1 |
14.5 |
244.4 |
Earnings per share - diluted |
0.19 |
0.06 |
0.02 |
0.27 |
Numbers may not add due to rounding.
The table above reflects only line items with non-GAAP adjustments.
- Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties.
- Exclude net losses on investments in equity securities.
- Exclude partial reversal of COVID-19 antibodies inventory charge and asset impairment, restructuring and other special charges primarily related to the impairment of a contract-based intangible asset from our acquisition of
Loxo Oncology .
|
||||||||||||
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited) |
||||||||||||
(Dollars in millions, except per share data) |
||||||||||||
Twelve Months Ended |
Twelve Months Ended |
|||||||||||
GAAP |
Adjustments(b) |
Non-GAAP |
GAAP |
Adjustments(c) |
Non-GAAP |
|||||||
Cost of sales |
$ |
6,629.8 |
$ |
(574.1) |
$ |
6,055.7 |
$ |
7,312.8 |
$ |
(908.8) |
$ |
6,404.0 |
Asset impairment, |
244.6 |
(244.6) |
— |
316.1 |
(316.1) |
— |
||||||
Other income (expense) |
(320.9) |
385.9 |
65.0 |
(201.6) |
227.2 |
25.6 |
||||||
Income tax expense |
561.6 |
263.0 |
824.6 |
573.8 |
300.1 |
873.9 |
||||||
Net income |
6,244.8 |
941.6 |
7,186.4 |
5,581.7 |
1,152.0 |
6,733.7 |
||||||
Earnings per share - |
6.90 |
1.04 |
7.94 |
6.12 |
1.27 |
7.39 |
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 |
(b) |
Adjustments to certain GAAP reported measures for the twelve months ended |
(Dollars in millions, except per share data) |
Amortization(i) |
Equity |
Other specified |
Total |
Cost of sales |
(574.1) |
— |
— |
(574.1) |
Asset impairment, restructuring and other |
— |
— |
(244.6) |
(244.6) |
Other income (expense) |
— |
385.9 |
— |
385.9 |
Income tax expense |
118.8 |
85.6 |
58.5 |
263.0 |
Net income |
455.3 |
300.3 |
186.1 |
941.6 |
Earnings per share – diluted |
0.50 |
0.33 |
0.21 |
1.04 |
Numbers may not add due to rounding.
The table above reflects only line items with non-GAAP adjustments.
- Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties.
- Exclude net losses on investments in equity securities.
- Exclude primarily the intangible asset impairment for GBA1 Gene Therapy (PR001) due to changes in estimated launch timing, as well as acquisition and integration costs associated with closing of the acquisition of Akouos, Inc.
(c) |
Adjustments to certain GAAP reported measures for the twelve months ended |
(Dollars in millions, except |
Amortization(i) |
Equity |
Repurchase of |
Other specified |
Total |
Cost of sales |
$ (614.9) |
$ — |
$ — |
$ (293.9) |
(908.8) |
Asset impairment, |
— |
— |
— |
(316.1) |
(316.1) |
Other income (expense) |
— |
(178.0) |
405.2 |
— |
227.2 |
Income tax expense |
127.8 |
(34.4) |
85.1 |
121.5 |
300.1 |
Net income |
487.1 |
(143.5) |
320.1 |
488.5 |
1,152.0 |
Earnings per share - |
0.53 |
(0.16) |
0.35 |
0.54 |
1.27 |
Numbers may not add due to rounding.
The table above reflects only line items with non-GAAP adjustments.
- Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties.
- Exclude net gains on investments in equity securities.
- Exclude charge related to the repurchase of higher-cost debt.
- Exclude COVID-19 antibodies inventory charge and asset impairment, restructuring and other special charges primarily related to an intangible asset impairment resulting from the sale of rights to Qbrexza®, the impairment of a contract-based intangible asset from our acquisition of
Loxo Oncology , as well as acquisition and integration costs associated with the acquisition ofPrevail Therapeutics Inc.
Refer to: |
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