- The Washington Times - Monday, April 20, 2009

INDIANAPOLIS (AP) - Eli Lilly & Co. said Monday flat costs and strong sales of several top-selling drugs boosted first-quarter profit 23 percent, surpassing Wall Street expectations.

Higher sales volume and increased prices helped boost revenue from many of Lilly’s drugs. Those factors helped offset a reduction in revenue caused by the stronger dollar, the company said.

Sales of the antidepressant Cymbalta, Lilly’s second-best seller, grew 17 percent to $709 million, and the insulin Humalog saw revenue rise 11 percent to $450.6 million.

Lilly earned $1.31 billion, or $1.20 per share, compared with profit of $1.06 billion, or 97 cents per share, during the same period a year earlier. Revenue rose 5 percent to $5.05 billion.

Analysts polled by Thomson Reuters expected profit of 99 cents per share on revenue of $5.05 billion.

The cancer drug Alimta saw strong growth, with sales surging 36 percent to $335 million.

Lilly also recorded $94.1 million in revenue from the cancer drug Erbitux, which was part of the company’s $6-billion-plus acquisition of ImClone Systems Inc. last fall.

However, Lilly’s top seller, the anti-psychotic Zyprexa, had flat sales of $1.12 billion. Another top-selling drug, the cancer treatment Gemzar, saw sales fall 14 percent to $367.8 million.

The company said its overall costs remained flat on a mix of lower marketing expenses and higher research and development expenses. Lilly’s cost of sales fell 27 percent to $816 million.

Lilly Chief Financial Officer Derica Rice told analysts during a conference call that volume-driven revenue growth and strong operating cash flow helped Lilly start strong in 2009.

Company officials also touted Lilly’s pipeline of drugs in development during the call. Steven Paul, Lilly’s executive vice president of science and technology, said the company is aiming for two launches per year of “high-value medicines” by 2013.

That’s important because Lilly is set to lose patent protection on Zyprexa in 2011. Then patents for its next three highest-selling drugs _ Cymbalta, Humalog and Gemzar _ are set to expire in 2013.

Company officials also briefly discussed the blood-thinning drug prasugrel, which Lilly launched earlier this year in Germany and the United Kingdom under the brand name Efient. Some analysts predict that prasugrel will eventually surpass $1 billion in sales, but it still awaits U.S. approval.

In February, a Food and Drug Administration cardiology panel said the drug marks a significant advance over older treatments and should be approved. But the FDA later said an influential cardiologist who has criticized the drug was improperly barred from that panel.

A Congressional subcommittee has since requested information about the panel selection, but Lilly officials said Monday they don’t believe the FDA’s final decision on the drug will be linked to that request.

“As soon as we receive approval, we are prepared to launch this product,” Rice said.

Lilly had reported losses in the final two quarters of 2008 due to one-time charges for the ImClone acquisition and a settlement of investigations into marketing practices behind Zyprexa.

Looking ahead, the company backed full-year profit guidance between $4 and $4.25 per share. Analysts forecast $4.14 per share.

Lilly shares fell 56 cents to $33.19 in Monday afternoon trading, while the Standard & Poor’s 500 index dropped nearly 4 percent.

___

AP Business Writer Damian J. Troise in New York contributed to this report.

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