Lilly Reports Fourth-Quarter and Full-Year 2012 Results, Revises 2013 EPS Guidance
- Fourth quarter revenue declined 1 percent driven by Zyprexa patent expiration, largely offset by growth in other products.
- Fourth quarter earnings per share were
$0.74 (reported), or$0.85 (non-GAAP). - Full-year 2012 revenue declined 7 percent to
$22.6 billion . - Full-year 2012 earnings per share totaled
$3.66 (reported), or$3.39 (non-GAAP). - 2013 guidance increased by
$0.07 per share to reflect the estimated benefit from the delayed enactment of the American Taxpayer Relief Act of 2012. - 2013 earnings per share now expected to be in the range of
$4.10 to $4.25 (reported), or$3.82 to $3.97 (non-GAAP).
$ in millions, except per share data |
Fourth Quarter |
% |
Full Year |
% | |||
2012 |
2011 |
Growth |
2012 |
2011 |
Growth | ||
Total Revenue — Reported |
|
|
(1)% |
|
|
(7)% | |
Net Income — Reported |
827.2 |
858.2 |
(4)% |
4,088.6 |
4,347.7 |
(6)% | |
EPS — Reported |
0.74 |
0.77 |
(4)% |
3.66 |
3.90 |
(6)% | |
Net Income — non-GAAP |
945.2 |
968.9 |
(2)% |
3,784.0 |
4,913.5 |
(23)% | |
EPS — non-GAAP |
0.85 |
0.87 |
(2)% |
3.39 |
4.41 |
(23)% |
Financial results for 2012 and 2011 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 results exclude the items described in the reconciliation tables later in the release. The non-GAAP results are presented in order to provide additional insights into the underlying trends in the company's business. The company's 2013 financial guidance is also being provided on both a reported and a non-GAAP basis.
"Lilly delivered solid financial results in the fourth quarter of 2012, as we successfully offset a large part of the revenue decline from the Zyprexa patent expiration with growth in other products such as Cymbalta, Forteo, Alimta, Effient and our animal health portfolio," said
Key Events Over the Last Three Months
- The company's board of directors authorized a new
$1.5 billion share repurchase program, which the company anticipates completing in 2013. The company repurchased$400 million of shares in 2012 under this program and also completed a previously authorized share repurchase program. - The company announced plans to conduct an additional Phase III study of solanezumab in patients with mild Alzheimer's disease. Enrollment is expected to begin no later than the third quarter of 2013.
- The company and its partner, Boehringer Ingelheim, announced top-line results for four completed Phase III clinical trials for empagliflozin, an investigational sodium glucose co-transporter-2 (SGLT-2) inhibitor being studied for treatment of patients with type 2 diabetes. In all four studies, the primary efficacy endpoint, defined as significant change in HbA1c from baseline compared to placebo, was met with empagliflozin (10 and 25 mg) taken once daily.
- The company and its partner, Boehringer Ingelheim, adjusted the scope of their diabetes alliance, with Lilly reassuming sole worldwide development and commercialization rights for LY2605541, Lilly's investigational novel basal insulin analog which is currently in Phase III clinical testing.
- The company stopped one of three Phase III rheumatoid arthritis (RA) registration studies of tabalumab, an anti-BAFF monoclonal antibody, due to insufficient efficacy. The decision was not based on safety concerns, and patients currently enrolled in other tabalumab RA studies will continue treatment.
The European Commission approved Cialis® 5 mg for once daily use for the treatment of the signs and symptoms of benign prostatic hyperplasia (BPH).- Amyvid™ received marketing authorization from the
European Commission as a diagnostic radiopharmaceutical indicated for Positron Emission Tomography (PET) imaging of beta-amyloid neuritic plaque density in the brains of adult patients with cognitive impairment who are being evaluated for Alzheimer's disease and other causes of cognitive impairment. - The company received notification from its partner, Bristol-Myers Squibb, to terminate the collaboration for necitumumab in
North America andJapan , which will result in Lilly assuming sole worldwide development and commercialization rights. Necitumumab is currently in Phase III testing as a potential treatment for squamous non-small cell lung cancer. - The company reached an agreement with the
U.S. Securities and Exchange Commission (SEC) to settle theSEC 's investigation into the company's compliance with the U.S. Foreign Corrupt Practices Act (FCPA). Without admitting or denying the allegations, Lilly paid a civil settlement amount of$29.4 million and agreed to have an independent compliance consultant conduct a 60-day review of the company's internal controls and compliance program related to the FCPA.
Fourth-Quarter Reported Results
In the fourth quarter of 2012, worldwide total revenue was
Gross margin decreased 0.3 percent to
Total operating expense, defined as the sum of research and development, marketing, selling and administrative expenses, decreased 1 percent compared with the fourth quarter of 2011 to
In the fourth quarter of 2012, the company recognized a
Operating income in the fourth quarter of 2012 was
Other income (expense) was a net expense of
The effective tax rate was 18.3 percent in the fourth quarter of 2012, compared with an effective tax rate of 17.6 percent in the fourth quarter of 2011. The increase in the fourth quarter 2012 effective tax rate reflects the expiration of the R&D tax credit in the U.S. at the end of 2011, partially offset by the tax benefit related to the intangible asset impairment for liprotamase.
Although operating income was essentially flat, higher other expense caused net income and earnings per share to decrease 4 percent to
Fourth-Quarter 2012 non-GAAP Results
On a non-GAAP basis, fourth quarter 2012 operating income increased 3 percent to
Non-GAAP results exclude items totaling
Fourth Quarter |
||||
2012 |
2011 |
% Change | ||
Earnings per share (reported) |
|
|
(4)% | |
Asset impairment, restructuring and other special charges |
0.11 |
0.10 |
||
Earnings per share (non-GAAP) |
|
|
(2)% |
Full-Year 2012 Reported Results
For the full-year 2012, worldwide total revenue decreased 7 percent to
Gross margin decreased 7 percent to
Total operating expense decreased 1 percent in 2012. Marketing, selling and administrative expenses decreased 5 percent to
In 2012, the company recognized charges of
Operating income in 2012 decreased 14 percent to
Other income (expense) in 2012 was a net income of
The effective tax rate was 24.4 percent in 2012, compared with 18.7 percent in 2011. The increase in the 2012 effective tax rate reflects the tax impact of the payment received from Amylin and the expiration of the R&D tax credit at the end of 2011, partially offset by the tax benefit related to the intangible asset impairment for liprotamase. The effective tax rate for 2011 was lower due to a tax benefit on the in-process research and development charge associated with the Boehringer Ingelheim diabetes collaboration, as well as a benefit of
For the full-year 2012, net income and earnings per share decreased 6 percent to
Full-Year 2012 non-GAAP Results
Operating income decreased 21 percent to
For purposes of non-GAAP reporting, items totaling
Full-Year |
% Change | |||
2012 |
2011 |
|||
Earnings per share (reported) |
|
|
(6)% | |
In-process research and development charges associated with Boehringer Ingelheim collaboration |
- |
0.23 |
||
Asset impairment, restructuring and other special charges |
0.16 |
0.29 |
||
Income from early payment of exenatide revenue-sharing obligation |
(0.43) |
- |
||
Earnings per share (non-GAAP) |
|
|
(23)% |
Numbers in the 2011 full-year column do not add due to rounding.
Revenue Highlights | |||||||||||
(Dollars in millions) |
Fourth Quarter |
% Change Over/(Under) |
Full-Year |
% Change | |||||||
2012 |
2011 |
2011 |
2012 |
2011 |
2011 | ||||||
Cymbalta® |
|
|
20% |
|
|
20% | |||||
Alimta® |
684.3 |
638.1 |
7% |
2,594.3 |
2,461.1 |
5% | |||||
Humalog® |
616.0 |
662.0 |
(7)% |
2,395.5 |
2,367.6 |
1% | |||||
Cialis |
513.4 |
494.2 |
4% |
1,926.8 |
1,875.6 |
3% | |||||
Zyprexa |
384.8 |
749.6 |
(49)% |
1,701.4 |
4,622.0 |
(63)% | |||||
Humulin® |
343.0 |
345.6 |
(1)% |
1,239.1 |
1,248.8 |
(1)% | |||||
Forteo® |
314.6 |
262.5 |
20% |
1,151.0 |
949.8 |
21% | |||||
Evista® |
241.0 |
267.1 |
(10)% |
1,010.1 |
1,066.9 |
(5)% | |||||
Strattera® |
163.9 |
170.6 |
(4)% |
621.4 |
620.1 |
0% | |||||
Effient® |
120.6 |
90.9 |
33% |
457.2 |
302.5 |
51% | |||||
|
554.1 |
468.2 |
18% |
2,036.5 |
1,678.6 |
21% | |||||
Total Revenue |
|
|
(1)% |
|
|
(7)% | |||||
Cymbalta
For the fourth quarter of 2012, Cymbalta generated
For the full year of 2012, worldwide Cymbalta sales increased 20 percent to
Alimta
For the fourth quarter of 2012, Alimta generated sales of
For the full year of 2012, worldwide Alimta sales increased 5 percent to
Humalog
For the fourth quarter of 2012, worldwide Humalog sales decreased 7 percent, to
For the full year of 2012, worldwide Humalog sales increased 1 percent to
Cialis
Cialis sales for the fourth quarter of 2012 increased 4 percent to
For the full year of 2012, worldwide Cialis sales increased 3 percent to
Zyprexa
In the fourth quarter of 2012, Zyprexa sales totaled
For the full year of 2012, worldwide Zyprexa sales totaled
Humulin
Worldwide Humulin sales decreased 1 percent in the fourth quarter of 2012, to
For the full year of 2012, worldwide Humulin sales decreased 1 percent to
Forteo
Fourth-quarter sales of Forteo were
For the full year of 2012, worldwide Forteo sales increased 21 percent to
Evista
Evista sales for the fourth quarter of 2012 decreased 10 percent to
For the full year of 2012, worldwide Evista sales decreased 5 percent to
Strattera
During the fourth quarter of 2012, Strattera generated
For the full year of 2012, worldwide Strattera sales were relatively flat at
Effient
Effient sales were
For the full year of 2012, worldwide Effient sales increased 51 percent to
Erbitux®
Lilly recognizes net royalties received from its Erbitux collaboration partners and revenue from manufactured product sold to these partners. For the fourth quarter of 2012, Lilly recognized total revenue of
Worldwide sales of animal health products in the fourth quarter of 2012 were
For the full year of 2012, worldwide animal health sales increased 21 percent to
2013 Financial Guidance
The company has revised certain elements of its 2013 financial guidance to reflect an estimated
2013 Expectations |
2012 Results |
% Change | |||
Earnings per share (reported) |
|
|
12% to 16% | ||
Asset impairments, restructuring and other special charges |
- |
0.16 |
|||
Income from early payment of Amylin revenue-sharing obligation |
(0.28) |
(0.43) |
|||
Earnings per share (non-GAAP) |
|
|
13% to 17% |
The company still anticipates 2013 revenue of between
The company still anticipates that gross margin as a percent of revenue will be approximately 78 percent.
Marketing, selling and administrative expenses are still expected in the range of
On a reported basis, other income and deductions is still expected to be in a range between
On a reported basis, the 2013 tax rate is now expected to be approximately 21.0 percent, assuming a full-year 2013 benefit of the R&D tax credit. On a non-GAAP basis, the 2013 tax rate is now expected to be approximately 19.5 percent. Both tax rates for 2013 include an estimated
Operating cash flows are still expected to be more than sufficient to allow for capital expenditures of approximately
Webcast of Conference Call
As previously announced, investors and the general public can access a live webcast of the fourth-quarter and full-year 2012 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 2012; asset impairments 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)
Amyvid™ (florbetapir, Lilly)
Axiron® (testosterone,
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Effient® (prasugrel, Lilly)
Erbitux® (cetuximab,
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)
Tradjenta® (linagliptin, Boehringer Ingelheim)
Xigris® (drotrecogin alfa (activated), Lilly)
Zyprexa® (olanzapine, Lilly)
_________________________________________________________________
|
||||
|
| |||
Worldwide Employees |
38,350 |
38,080 |
| ||||||||||||||||
Operating Results (Unaudited) — REPORTED | ||||||||||||||||
(Dollars in millions, except per share data) | ||||||||||||||||
Three Months Ended |
Twelve Months Ended | |||||||||||||||
|
| |||||||||||||||
2012 |
2011 |
% Chg. |
2012 |
2011 |
% Chg. | |||||||||||
Total Revenue |
$ |
5,957.3 |
$ |
6,046.6 |
(1)% |
$ |
22,603.4 |
$ |
24,286.5 |
(7)% | ||||||
Cost of sales |
1,248.3 |
1,321.7 |
(6)% |
4,796.5 |
5,067.9 |
(5)% | ||||||||||
Research and development |
1,463.1 |
1,355.3 |
8% |
5,278.1 |
5,020.8 |
5% | ||||||||||
Marketing, selling and administrative |
1,977.5 |
2,133.4 |
(7)% |
7,513.5 |
7,879.9 |
(5)% | ||||||||||
Acquired in-process research and development |
- |
- |
NM |
- |
388.0 |
NM | ||||||||||
Asset impairments, restructuring and other special charges |
204.0 |
167.6 |
22% |
281.1 |
401.4 |
(30)% | ||||||||||
Operating income |
1,064.4 |
1,068.6 |
0% |
4,734.2 |
5,528.5 |
(14)% | ||||||||||
Net interest income (expense) |
(16.5) |
(25.6) |
(72.8) |
(106.1) |
||||||||||||
Other income (expense) — Special |
- |
- |
787.8 |
- |
||||||||||||
Net other income (expense) |
(35.5) |
(1.2) |
(41.0) |
(72.9) |
||||||||||||
Other income (expense) |
(52.0) |
(26.8) |
94% |
674.0 |
(179.0) |
NM | ||||||||||
Income before income taxes |
1,012.4 |
1,041.8 |
(3)% |
5,408.2 |
5,349.5 |
1% | ||||||||||
Income taxes |
185.2 |
183.6 |
1% |
1,319.6 |
1,001.8 |
32% | ||||||||||
Net income |
$ |
827.2 |
$ |
858.2 |
(4)% |
4,088.6 |
4,347.7 |
(6)% | ||||||||
Earnings per share — diluted |
$ |
0.74 |
$ |
0.77 |
(4)% |
3.66 |
3.90 |
(6)% | ||||||||
Dividends paid per share |
$ |
0.49 |
$ |
0.49 |
NM |
1.96 |
1.96 |
NM | ||||||||
Weighted-average shares outstanding (thousands) — diluted |
1,113,880 |
1,115,883 |
1,117,294 |
1,113,967 |
||||||||||||
NM — not meaningful |
Operating Results (Unaudited) — Non-GAAP | |||||||||||||
(Dollars in millions, except per share data) | |||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
|
| ||||||||||||
2012(a) |
2011(b) |
% Chg. |
2012(a) |
2011(b) |
% Chg. | ||||||||
Total Revenue |
$ |
5,957.3 |
$ |
6,046.6 |
(1)% |
$ |
22,603.4 |
$ |
24,286.5 |
(7)% | |||
Cost of sales |
1,248.3 |
1,321.7 |
(6)% |
4,796.5 |
5,067.9 |
(5)% | |||||||
Research and development |
1,463.1 |
1,355.3 |
8% |
5,278.1 |
5,020.8 |
5% | |||||||
Marketing, selling and administrative |
1,977.5 |
2,133.4 |
(7)% |
7,513.5 |
7,879.9 |
(5)% | |||||||
Operating income |
1,268.4 |
1,236.2 |
3% |
5,015.3 |
6,317.9 |
(21)% | |||||||
Net interest income (expense) |
(16.5) |
(25.6) |
(72.8) |
(106.1) |
|||||||||
Net other income (expense) |
(35.5) |
(1.2) |
(41.0) |
(72.9) |
|||||||||
Other income (expense) |
(52.0) |
(26.8) |
94% |
(113.8) |
(179.0) |
(36)% | |||||||
Income before income taxes |
1,216.4 |
1,209.4 |
1% |
4,901.5 |
6,138.9 |
(20)% | |||||||
Income taxes |
271.2 |
240.5 |
13% |
1,117.5 |
1,225.4 |
(9)% | |||||||
Net income |
$ |
945.2 |
$ |
968.9 |
(2)% |
$ |
3,784.0 |
$ |
4,913.5 |
(23)% | |||
Earnings per share — diluted |
$ |
0.85 |
$ |
0.87 |
(2)% |
$ |
3.39 |
$ |
4.41 |
(23)% | |||
Dividends paid per share |
$ |
0.49 |
$ |
0.49 |
NM |
$ |
1.96 |
$ |
1.96 |
NM | |||
Weighted-average shares outstanding (thousands) — diluted |
1,113,880 |
1,115,883 |
1,117,294 |
1,113,967 |
(a) The fourth-quarter 2012 financial statements have been adjusted to eliminate asset impairments, restructuring and other special charges totaling
(b) The fourth-quarter 2011 financial statements have been adjusted to eliminate asset impairments, restructuring and other special charges totaling
Refer to: (317) 433-9899 — (317) 655-6874 —
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