Lilly Reports Fourth-Quarter and Full-Year 2013 Results
- Fourth-quarter 2013 revenue declined 2 percent driven by Cymbalta U.S. patent expiration, partially offset by growth in other products.
- Fourth-quarter 2013 earnings per share were
$0.67 (reported), or$0.74 (non-GAAP). - Full-year 2013 revenue increased 2 percent to
$23.1 billion . - Full-year 2013 earnings per share totaled
$4.32 (reported), or$4.15 (non-GAAP). - Approximately
$3.8 billion in cash was returned to shareholders in 2013 through dividends and share repurchases. - 2014 EPS guidance confirmed to be in the range of
$2.77 to$2.85 .
$ in millions, except per share data |
Fourth Quarter |
% |
Full Year |
% | |||
2013 |
2012 |
Growth |
2013 |
2012 |
Growth | ||
Total Revenue - Reported |
|
|
(2)% |
|
|
2% | |
Net Income - Reported |
727.5 |
827.2 |
(12)% |
4,684.8 |
4,088.6 |
15% | |
EPS - Reported
|
0.67 |
0.74 |
(9)% |
4.32 |
3.66 |
18% | |
Net Income - non-GAAP |
796.9 |
945.2 |
(16)% |
4,502.6 |
3,784.0 |
19% | |
EPS - non-GAAP |
0.74 |
0.85 |
(13)% |
4.15 |
3.39 |
22% |
Certain financial information for 2013 and 2012 are 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 period. Non-GAAP measures exclude the items described in the reconciliation tables later in the release. The non-GAAP measures are presented in order to provide additional insights into the underlying trends in the company's business. The company's 2014 financial guidance is also being provided on both a reported and a non-GAAP basis.
"Lilly's fourth-quarter 2013 results reflect the initial impact from the U.S. patent expiration for Cymbalta. The loss of the Cymbalta patent, along with the expiration of the U.S. patent for Evista in March of this year will result in a substantial decline in revenue and earnings in 2014," said
Key Events Over the Last Three Months
- U.S. patent exclusivity for Cymbalta® expired on
December 11, 2013 , resulting in the entry of several generic competitors. - As part of its previously-announced share repurchase program, the company repurchased approximately
$500 million in company stock in the fourth quarter of 2013. For the full-year 2013, the company returned approximately$3.8 billion in cash to shareholders through its dividend and share repurchase program. - The company and its alliance partner, Boehringer Ingelheim, announced that the
U.S. Food and Drug Administration accepted the filing of the New Drug Application for LY2963016, an investigational basal (long-acting) insulin. This new insulin glargine product was also submitted inJapan . - The company acquired all development and commercial rights from Arteaus Therapeutics for a calcitonin gene-related peptide (CGRP) antibody as a potential treatment for the prevention of frequent, recurrent migraine headaches, following a successful Phase II proof-of-concept study.
- The company entered into a collaboration with Pfizer Inc. to co-develop and jointly commercialize tanezumab, a monoclonal antibody being investigated to treat moderate-to-severe chronic osteoarthritis pain, chronic low back pain, and cancer-related bone pain.
- The company announced that results from three Phase III studies of edivoxetine did not achieve the primary study objective of superior efficacy in depression after eight weeks of treatment. While the safety and tolerability of edivoxetine were consistent with previous studies, the efficacy results do not support a regulatory submission for adjunctive treatment in patients with Major Depressive Disorder (MDD).
Fourth-Quarter Reported Results
In the fourth quarter of 2013, worldwide total revenue was
Gross margin decreased 6 percent to
Total operating expenses in the fourth quarter of 2013, defined as the sum of research and development, marketing, selling and administrative expenses was
In the fourth quarter of 2013, the company recognized a charge of
In the fourth quarter of 2013, the company recognized asset impairment, restructuring and other special charges of
Operating income in the fourth quarter of 2013 was
Other income (expense) was income of
The effective tax rate was 20.0 percent in the fourth quarter of 2013, reflecting the reinstatement of the R&D tax credit in the U.S. effective
In the fourth quarter of 2013, net income decreased 12 percent and earnings per share decreased 9 percent to
Fourth-Quarter 2013 non-GAAP Measures
On a non-GAAP basis, fourth-quarter 2013 operating income decreased
The decreases in net income and earnings per share were driven by lower operating income, partially offset by higher other income and a lower effective tax rate. Earnings per share benefited from a lower number of shares outstanding in the fourth quarter of 2013 compared to the fourth quarter of 2012.
Non-GAAP measures exclude items totaling
Fourth Quarter |
||||
2013 |
2012 |
% Change | ||
Earnings per share (reported) |
|
|
(9)% | |
Asset impairment, restructuring and other special charges |
.03 |
.11 |
||
Acquired in-process research and development charge associated with CGRP antibody |
.03 |
- | ||
Earnings per share (non-GAAP) |
|
|
(13)% |
Numbers do not add due to rounding.
Full-Year 2013 Reported Results
For the full-year 2013, worldwide total revenue increased 2 percent to
Gross margin increased 2 percent to
Total operating expenses decreased 1 percent in 2013. Marketing, selling and administrative expenses decreased 5 percent to
In 2013, the company recognized an acquired in-process research and development charge of
Additionally, in 2013 the company recognized asset impairment, restructuring, and other special charges of
Operating income in 2013 increased 13 percent compared to 2012 to
Other income (expense) in 2013 was income of
The effective tax rate was 20.5 percent in 2013, compared with 24.4 percent in 2012. The 2012 effective tax rate reflects the expiration of the R&D tax credit and the tax impact of the payment received from Amylin, partially offset by the tax benefit related to the intangible asset impairment for liprotamase. The decrease in the 2013 effective tax rate reflects the reinstatement of the R&D tax credit in the U.S. effective
For the full-year 2013, net income increased 15 percent and earnings per share increased 18 percent to
Full-Year 2013 non-GAAP Measures
Operating income increased 11 percent to
Non-GAAP measures exclude items totaling
Full-Year |
||||
2013 |
2012 |
% Change | ||
Earnings per share (reported) |
|
|
18% | |
Asset impairment, restructuring and other special charges |
.08 |
.16 |
||
Income related to termination of the exenatide collaboration with Amylin |
(.29) |
(.43) |
||
Acquired in-process research and development charge associated with CGRP antibody |
.03 |
- | ||
Earnings per share (non-GAAP) |
|
|
22% |
Numbers do not add due to rounding.
Revenue Highlights | |||||||||||
(Dollars in millions) |
Fourth Quarter |
% Change Over/(Under) |
Full-Year |
% Change Over/(Under) | |||||||
2013 |
2012 |
2012 |
2013 |
2012 |
2012 | ||||||
Cymbalta |
|
|
(38)% |
|
|
2% | |||||
Alimta® |
726.2 |
684.3 |
6% |
2,703.0 |
2,594.3 |
4% | |||||
Humalog® |
733.9 |
616.0 |
19% |
2,611.2 |
2,395.5 |
9% | |||||
Cialis® |
588.3 |
513.4 |
15% |
2,159.4 |
1,926.8 |
12% | |||||
Humulin® |
369.5 |
343.0 |
8% |
1,315.8 |
1,239.1 |
6% | |||||
Forteo® |
359.8 |
314.6 |
14% |
1,244.9 |
1,151.0 |
8% | |||||
Zyprexa |
348.2 |
384.8 |
(10)% |
1,194.8 |
1,701.4 |
(30)% | |||||
Evista |
275.9 |
241.0 |
14% |
1,050.4 |
1,010.1 |
4% | |||||
Strattera® |
201.1 |
163.9 |
23% |
709.2 |
621.4 |
14% | |||||
Effient® |
130.6 |
120.6 |
8% |
508.7 |
457.2 |
11% | |||||
|
578.4 |
554.1 |
4% |
2,151.5 |
2,036.5 |
6% | |||||
Total Revenue |
|
|
(2)% |
|
|
2% | |||||
Cymbalta
For the fourth quarter of 2013, Cymbalta generated
For the full year of 2013, worldwide Cymbalta sales increased 2 percent to
Alimta
For the fourth quarter of 2013, Alimta generated sales of
For the full year of 2013, worldwide Alimta sales increased 4 percent to
Humalog
For the fourth quarter of 2013, worldwide Humalog sales increased 19 percent, to
For the full year of 2013, worldwide Humalog sales increased 9 percent to
Cialis
Cialis sales for the fourth quarter of 2013 increased 15 percent to
For the full year of 2013, worldwide Cialis sales increased 12 percent to
Humulin
Worldwide Humulin sales increased 8 percent in the fourth quarter of 2013, to
For the full year of 2013, worldwide Humulin sales increased 6 percent to
Forteo
Fourth-quarter 2013 sales of Forteo were
For the full year of 2013, worldwide Forteo sales increased 8 percent to
Zyprexa
In the fourth quarter of 2013, Zyprexa sales totaled
For the full year of 2013, worldwide Zyprexa sales decreased 30 percent to
Evista
Evista sales for the fourth quarter of 2013 increased 14 percent to
For the full year of 2013, worldwide Evista sales increased 4 percent to
Strattera
During the fourth quarter of 2013, Strattera generated
For the full year of 2013, worldwide Strattera sales increased 14 percent to
Effient
Effient sales were
For the full year of 2013, worldwide Effient sales increased 11 percent to
In the fourth quarter of 2013, worldwide animal health sales totaled
For the full year of 2013, worldwide animal health sales increased 6 percent to
2014 Financial Guidance
The company has confirmed its 2014 financial guidance. The company still expects full-year 2014 earnings per share to be in the range of
2014 Expectations |
2013 Results |
% Change | |||
Earnings per share (reported) |
|
|
(36)% to (34)% | ||
Asset impairment, restructuring and other special charges |
- |
.08 |
|||
Income related to termination of the exenatide collaboration with Amylin |
- |
(.29) |
|||
Acquired in-process research and development charge associated with CGRP antibody |
- |
.03 |
|||
Earnings per share (non-GAAP) |
|
|
(33)% to (31)% |
The company anticipates 2014 revenue of between
The company anticipates that gross margin as a percent of revenue will be approximately 74 percent in 2014.
Total operating expenses in 2014 are expected to decrease substantially compared to 2013. Marketing, selling and administrative expenses are expected in the range of
Other income (expense) is expected to be in a range between
The 2014 tax rate is expected to be approximately 20 percent, assuming a full-year 2014 benefit of the R&D tax credit and other tax provisions up for extension. If these items are not extended, the 2014 tax rate would be approximately 2 percentage points higher.
The company expects to meet its 2014 net income and operating cash flow goals of
The company's 2014 financial guidance does not include a potential charge related to the collaboration with Pfizer to develop and commercialize tanezumab. As previously communicated, if the partial clinical hold for the molecule is removed and Lilly and Pfizer move forward with development, Lilly will pay a
Webcast of Conference Call
As previously announced, investors and the general public can access a live webcast of the fourth-quarter and full-year 2013 financial results conference call through a link on Lilly's website at www.lilly.com. The conference call will be held today from
Lilly, a leading innovation-driven corporation, is developing a growing portfolio of pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in
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" and similar expressions are intended to identify forward-looking statements. Actual results may differ materially due to various factors. There are significant risks and uncertainties in pharmaceutical research and development. There can be no guarantees with respect to pipeline products that the products will receive the necessary clinical and manufacturing regulatory approvals or that they will prove to be commercially successful. Pharmaceutical products can develop unexpected safety or efficacy concerns. The company's results may also be affected by such
factors as competitive developments affecting current products; market uptake of recently launched products; the timing of anticipated regulatory approvals and launches of new products; regulatory actions regarding currently marketed products; issues with product supply; regulatory changes or other developments; regulatory compliance problems or government investigations; patent disputes; changes in patent law or regulations related to data-package exclusivity; other litigation involving current or future products; the impact of governmental actions regarding pricing, importation, and reimbursement for pharmaceuticals, including U.S. health care reform and deficit-reduction measures; changes in tax laws, including the American Taxpayer Relief Act of 2013; asset impairment and restructuring charges; acquisitions and business development transactions; and the impact of exchange rates and
global macroeconomic conditions. 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-Q and Form 10-K filed with the
Alimta® (pemetrexed, Lilly)
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Effient® (prasugrel, Lilly)
Evista® (raloxifene hydrochloride, Lilly)
Forteo® (teriparatide of recombinant DNA origin injection, Lilly)
Humalog® (insulin lispro injection of recombinant DNA origin, Lilly)
Humulin® (human insulin of recombinant DNA origin, Lilly)
Strattera® (atomoxetine hydrochloride, Lilly)
Trajenta® (linagliptin, Boehringer Ingelheim)
Trifexis® (spinosad + milbemycin oxime, Lilly)
Zyprexa® (olanzapine, Lilly)
| ||
|
| |
Worldwide Employees |
37,925 |
38,350 |
| ||||||||||||||||||||||||||
Operating Results (Unaudited) - REPORTED | ||||||||||||||||||||||||||
(Dollars in millions, except per share data) | ||||||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||
2013 |
2012 |
% Chg. |
2013 |
2012 |
% Chg. | |||||||||||||||||||||
Total revenue |
$ |
5,808.8 |
$ |
5,957.3 |
(2)% |
$ |
23,113.1 |
$ |
22,603.4 |
2% | ||||||||||||||||
Cost of sales |
1,386.5 |
1,248.3 |
11% |
4,908.1 |
4,796.5 |
2% | ||||||||||||||||||||
Research and development |
1,475.4 |
1,463.1 |
1% |
5,531.3 |
5,278.1 |
5% | ||||||||||||||||||||
Marketing, selling and administrative |
1,953.6 |
1,977.5 |
(1)% |
7,125.6 |
7,513.5 |
(5)% | ||||||||||||||||||||
Acquired in-process research and development |
57.1 |
- |
NM |
57.1 |
- |
NM | ||||||||||||||||||||
Asset impairment, restructuring and |
35.4 |
204.0 |
(83)% |
120.6 |
281.1 |
(57)% | ||||||||||||||||||||
Operating income |
900.8 |
1,064.4 |
(15)% |
5,370.4 |
4,734.2 |
13% | ||||||||||||||||||||
Net interest income (expense) |
(5.5) |
(16.5) |
(40.4) |
(72.8) |
||||||||||||||||||||||
Other income - special |
- |
- |
495.4 |
787.8 |
||||||||||||||||||||||
Net other income (expense) |
14.6 |
(35.5) |
63.9 |
(41.0) |
||||||||||||||||||||||
Other income (expense) |
9.1 |
(52.0) |
NM |
518.9 |
674.0 |
(23)% | ||||||||||||||||||||
Income before income taxes |
909.9 |
1,012.4 |
(10)% |
5,889.3 |
5,408.2 |
9% | ||||||||||||||||||||
Income taxes |
182.4 |
185.2 |
(2)% |
1,204.5 |
1,319.6 |
(9)% | ||||||||||||||||||||
Net income |
$ |
727.5 |
$ |
827.2 |
(12)% |
$ |
4,684.8 |
$ |
4,088.6 |
15% | ||||||||||||||||
Earnings per share - diluted |
$ |
0.67 |
$ |
0.74 |
(9)% |
$ |
4.32 |
$ |
3.66 |
18% | ||||||||||||||||
Dividends paid per share |
$ |
0.49 |
$ |
0.49 |
0% |
$ |
1.96 |
$ |
1.96 |
0% | ||||||||||||||||
Weighted-average shares |
1,078,976 |
1,113,880 |
1,084,766 |
1,117,294 |
||||||||||||||||||||||
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 Reported |
Adjustments |
Non-GAAP Adjusted(a) |
GAAP Reported |
Adjustments |
Non-GAAP Adjusted(a) | |||||||
Total revenue |
$ |
5,808.8 |
$ |
- |
$ |
5,808.8 |
$ |
5,957.3 |
$ |
- |
$ |
5,957.3 |
Cost of sales |
1,386.5 |
- |
1,386.5 |
1,248.3 |
- |
1,248.3 | ||||||
Operating expenses(b) |
3,429.0 |
- |
3,429.0 |
3,440.6 |
- |
3,440.6 | ||||||
Acquired in-process research and development(c) |
57.1 |
(57.1) |
- |
- |
- |
- | ||||||
Asset impairment, restructuring and other special charges(d) |
35.4 |
(35.4) |
- |
204.0 |
(204.0) |
- | ||||||
Other income (expense) |
9.1 |
- |
9.1 |
(52.0) |
- |
(52.0) | ||||||
Income taxes |
182.4 |
23.2 |
205.5 |
185.2 |
86.1 |
271.2 | ||||||
Net income |
727.5 |
69.3 |
796.9 |
827.2 |
117.9 |
945.2 | ||||||
Earnings per share - diluted |
0.67 |
0.07 |
0.74 |
0.74 |
0.11 |
0.85 | ||||||
Numbers do not add due to rounding. |
(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 items that are excluded when non-GAAP measures or expectations provided are typically highly variable, difficult to predict, and 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, marketing, selling and administrative expenses. |
(c) |
Certain GAAP reported measures have been adjusted to eliminate acquired in-process research and development charges. During the three months ended |
(d) |
Certain GAAP reported measures have been adjusted to eliminate asset impairment, restructuring and other special charges. During the three months ended |
|
||||||||||||
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 Reported |
Adjustments |
Non-GAAP Adjusted(a) |
GAAP Reported |
Adjustments |
Non-GAAP Adjusted(a) | |||||||
Total revenue |
$ |
23,113.1 |
- |
$ |
23,113.1 |
$ |
22,603.4 |
$ |
- |
$ |
22,603.4 | |
Cost of sales |
4,908.1 |
- |
4,908.1 |
4,796.5 |
- |
4,796.5 | ||||||
Operating expenses(b) |
12,656.9 |
- |
12,656.9 |
12,791.6 |
- |
12,791.6 | ||||||
Acquired in-process research and development(c) |
57.1 |
(57.1) |
- |
- |
- |
- | ||||||
Asset impairment, restructuring and other special charges(d) |
120.6 |
(120.6) |
- |
281.1 |
(281.1) |
- | ||||||
Other income (expense)(e) |
518.9 |
(495.4) |
23.5 |
674.0 |
(787.8) |
(113.8) | ||||||
Income taxes |
1,204.5 |
(135.4) |
1,069.0 |
1,319.6 |
(202.2) |
1,117.5 | ||||||
Net income |
4,684.8 |
(182.3) |
4,502.6 |
4,088.6 |
(304.5) |
3,784.0 | ||||||
Earnings per share - diluted |
4.32 |
0.17 |
4.15 |
3.66 |
0.27 |
3.39 | ||||||
Numbers do not add due to rounding. |
(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 items that are excluded when non-GAAP measures or expectations provided are typically highly variable, difficult to predict, and 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, marketing, selling and administrative expenses |
(c) |
Certain GAAP reported measures have been adjusted to eliminate acquired in-process research and development charges. During the twelve months ended |
(d) |
Certain GAAP reported measures have been adjusted to eliminate asset impairment, restructuring and other special charges. During the twelve months ended |
(e) |
Certain GAAP reported measures have been adjusted to eliminate a portion of other income (expense). During the twelve months ended |
Refer to: |
(317) 276-5795 - |
(317) 655-6874 - |
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