INDIANAPOLIS, July 23, 2015 /PRNewswire/ -- Eli Lilly and
Company (NYSE: LLY) today announced financial results for the
second quarter of 2015.
|
|
|
|
|
$ in millions, except
per share data
|
Second
Quarter
|
%
|
|
2015
|
|
2014
|
Change
|
Revenue –
Reported
|
$
|
4,978.7
|
|
|
$
|
4,935.6
|
|
1
|
%
|
Net Income –
Reported
|
600.8
|
|
|
733.5
|
|
(18)
|
%
|
EPS –
Reported
|
0.56
|
|
|
0.68
|
|
(18)
|
%
|
|
|
|
|
|
Revenue –
non-GAAP
|
4,978.7
|
|
|
5,211.2
|
|
(4)
|
%
|
Net Income –
non-GAAP
|
954.8
|
|
|
798.1
|
|
20
|
%
|
EPS –
non-GAAP
|
0.90
|
|
|
0.74
|
|
22
|
%
|
Certain financial information for 2015 and 2014 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 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. Non-GAAP measures in 2014 include the
results of Novartis Animal Health as if the acquisition and the
financing for the acquisition had occurred as of January 1, 2014. Non-GAAP financial measures
for all periods presented also exclude amortization of intangibles
primarily associated with costs of marketed products acquired or
licensed from third parties. The company's 2015 financial guidance
is also being provided on both a reported and a non-GAAP basis. The
non-GAAP measures are presented to provide additional insights into
the underlying trends in the company's business.
"Lilly remains on track to return to growth in 2015, driven by
strong underlying business performance, including uptake of our
recently launched products – Jardiance, Trulicity and Cyramza,"
said John C. Lechleiter, Ph.D.,
Lilly's chairman, president and chief executive officer. "With
tangible results from launches of new medicines and continued
progress in our pipeline, along with careful control of operational
expenses, we are confident that our innovation-based strategy will
continue to provide the basis for solid growth in the years
ahead."
Key Events Over the Last Three Months
- Cyramza® (ramucirumab) achieved a number of
development and commercial milestones:
- Approved and launched in the U.S. in combination with FOLFIRI
(irinotecan, folinic acid, and 5-fluorouracil) chemotherapy for the
treatment of patients with metastatic colorectal cancer with
disease progression on or after prior therapy with bevacizumab,
oxaliplatin, and a fluoropyrimidine.
- Launched in Japan for patients
with unresectable, advanced or recurrent gastric cancer.
- Submitted in Japan for
second-line metastatic colorectal cancer.
- The Japan Ministry of Health, Labor and Welfare approved
Trulicity™ (dulaglutide) as a treatment for type 2
diabetes. The company will co-promote Trulicity in Japan with Sumitomo Dainippon Pharma Co.,
Ltd.
- The U.S. Food and Drug Administration (FDA) approved
Humalog® 200 units/mL
KwikPen® (insulin lispro 200 units/mL; U-200), a
pre-filled pen containing a concentrated formulation of Lilly's
rapid-acting insulin Humalog® (insulin lispro 100
units/mL) to improve glycemic control in people with type 1 and
type 2 diabetes.
- The European Commission granted marketing authorization for
Synjardy® (empagliflozin/metformin) for the treatment of
adults with type 2 diabetes. Synjardy is part of the company's
diabetes collaboration with Boehringer Ingelheim.
- The FDA issued a Complete Response Letter for Synjardy, for the
treatment of adults with type 2 diabetes. Boehringer Ingelheim
submitted their response to the FDA and received a Class 1 status
for an expected decision within two months.
- The company is encouraged by the FDA Oncologic Drugs Advisory
Committee's review of data supporting necitumumab in combination
with gemcitabine and cisplatin for use in first-line treatment of
patients with advanced squamous non-small cell lung cancer. The
company believes necitumumab represents a meaningful advancement.
FDA action is expected by the end of the year.
- The company submitted ixekizumab in the EU for
moderate-to-severe plaque psoriasis.
- The company announced results from an extension of the Phase
III solanezumab trials, indicating the treatment effect was
preserved in patients with mild Alzheimer's disease, compared to
patients who began treatment at a later point, further suggesting a
potential disease-modifying effect on underlying disease
progression.
- The company announced collaborations with:
- AstraZeneca to evaluate the safety and preliminary efficacy of
AstraZeneca's investigational anti-PD-L1 immune checkpoint
inhibitor, MEDI4736, in combination with Cyramza, as a treatment
for patients with advanced solid tumors.
- Immunocore Limited to explore the utility of Immunocore's lead
T cell receptor-based investigational therapeutic, IMCgp100, in
combination with Lilly's galunisertib and merestinib for the
treatment of melanoma.
- Sarah Cannon Research Institute to co-develop an
investigational oncology compound, LY3023414, a PI3K/mTOR dual
inhibitor.
- BioNTech AG to discover novel cancer immunotherapies.
- Sanford-Burnham Medical Research Institute to discover and
develop immunological therapies.
- Dana-Farber Cancer Institute to research new medicines under
development to fight cancer.
- The UK Court of Appeal ruled that the Alimta®
(pemetrexed disodium) vitamin regimen patents would be indirectly
infringed by a generic competitor that had stated its intent to
market certain alternative salt forms of pemetrexed in
the United Kingdom, France,
Italy and Spain prior to the
patents' expiration in June 2021.
- The company announced plans to establish a new drug delivery
and device innovation center in Cambridge, Massachusetts, and to expand its existing
research and development center in San
Diego, California.
- The company issued €2.1 billion of euro-denominated debt and
repurchased $1.65 billion principal
amount of higher interest rate U.S. dollar-denominated debt.
Second-Quarter Reported Results
In the second quarter of 2015, worldwide revenue was
$4.979 billion, an increase of
1 percent compared with the second quarter of 2014. The
revenue growth included increases of 8 percent due to
increased volume and 1 percent due to higher prices, largely
offset by a decrease of 8 percent due to the unfavorable impact of
foreign exchange rates. The 8 percent increase in volume was
primarily due to the inclusion of revenue from Novartis Animal
Health, and to a lesser extent increased volume for several
products, including Cyramza and Trulicity. These worldwide volume
increases were partially offset by lower demand for
Cymbalta® and Evista®, largely due to U.S.
patent expirations in December 2013
and March 2014, respectively. Revenue
in the U.S. increased 6 percent to $2.528 billion, driven primarily by higher
prices, the inclusion of revenue from Novartis Animal Health and
increased volume for several products, partially offset by patent
expirations for Cymbalta and Evista. Revenue outside the U.S.
decreased 4 percent to $2.451
billion, driven by the unfavorable impact of foreign
exchange rates, partially offset by the inclusion of revenue from
Novartis Animal Health and increased volume for the majority of
pharmaceutical products, due in part to wholesaler buying patterns
in Japan.
Gross margin remained relatively flat at $3.760 billion in the second quarter of 2015, as
the favorable impact of foreign exchange rates on international
inventories sold and the inclusion of Novartis Animal Health were
largely offset by the foreign exchange impact on revenue and
inventory step-up and amortization costs. Gross margin as a percent
of revenue was 75.5 percent, a decrease of 0.4 percentage points
compared with the second quarter of 2014. The decrease in gross
margin percent was primarily due to the inclusion of Novartis
Animal Health and inventory step-up and amortization costs, largely
offset by the impact of foreign exchange rates on international
inventories sold.
Operating expenses in the second quarter of 2015, defined as the
sum of research and development and marketing, selling and
administrative expenses, were $2.805
billion, a decrease of 2 percent compared with the
second quarter of 2014. Research and development expenses decreased
2 percent to $1.169 billion, or 23.5
percent of revenue, driven primarily by the favorable impact of
foreign exchange rates, partially offset by expenses of Novartis
Animal Health. Marketing, selling and administrative expenses
decreased 2 percent to $1.635 billion, due to the favorable impact
of foreign exchange rates and ongoing cost-containment measures,
partially offset by expenses of Novartis Animal Health and
marketing and selling expenses related to new product launches.
In the second quarter of 2015, the company recognized acquired
in-process research and development charges of $80.0 million. These charges included a
$50.0 million payment to Hanmi
Pharmaceutical Co., Ltd., related to a previously announced
exclusive license and collaboration agreement for Hanmi's oral
Bruton's tyrosine kinase (BTK) inhibitor for the treatment of
autoimmune and other diseases, and a $30.0
million payment to BioNTech AG related to a research
collaboration to discover novel cancer immunotherapies. There were
no acquired in-process research and development charges in the
second quarter of 2014.
In the second quarter of 2015, the company recognized asset
impairment, restructuring and other special charges of $72.4 million. The charges primarily relate to
integration costs for Novartis Animal Health, asset impairments and
severance costs. There were no asset impairment, restructuring and
other special charges in the second quarter of 2014.
Operating income in the second quarter of 2015 was $803.0 million, a decline of 9 percent
compared with the second quarter of 2014, driven by higher acquired
in-process research and development charges and asset impairment,
restructuring and other special charges, partially offset by lower
operating expenses.
Other income (expense) was an expense of $123.3 million in the second quarter of 2015,
compared with income of $53.8 million
in the second quarter of 2014. Other expense in 2015 was
driven by a net charge of $152.7
million related to the repurchase of $1.65 billion of debt.
The effective tax rate was 11.6 percent in the second quarter of
2015, compared with 22.0 percent in the second quarter of 2014. The
decrease in the 2015 effective tax rate was primarily due to the
tax impact of the net charge related to the repurchase of debt,
acquired in-process research and development charges, and asset
impairment, restructuring and other special charges. The 2015
effective tax rate also reflected a net discrete tax benefit of
approximately $24 million. Neither period includes the benefit
of certain expired U.S. tax provisions, including the R&D tax
credit.
In the second quarter of 2015, net income decreased
18 percent to $600.8 million,
and earnings per share decreased 18 percent to $0.56, compared with $733.5 million and $0.68, respectively, in the second quarter of
2014. The declines in net income and earnings per share were driven
by charges related to the repurchase of debt and lower operating
income, partially offset by a lower effective tax rate.
Second-Quarter 2015 Non-GAAP Measures
On a non-GAAP basis, worldwide revenue was $4.979 billion in the second quarter of 2015, a
decline of 4 percent compared with the second quarter of 2014.
The revenue decline was driven by the unfavorable impact of foreign
exchange rates and lower demand for Cymbalta and Evista following
U.S. patent expirations, partially offset by increased volume for
several products, including Cyramza and Trulicity, and higher
prices. U.S. revenue increased 3 percent to $2.528 billion, driven primarily by higher
prices and increased volume for several products, partially offset
by the patent expirations for Cymbalta and Evista. Revenue outside
the U.S. decreased 11 percent to $2.451
billion, driven by the unfavorable impact of foreign
exchange rates, partially offset by increased volumes for the
majority of pharmaceutical products.
Gross margin decreased 1 percent to $3.945 billion in the second quarter of
2015, as the negative impact of foreign exchange rates on revenue
was largely offset by the favorable impact of foreign exchange
rates on international inventories sold and increased volume. Gross
margin as a percent of revenue was 79.2 percent, an increase of 2.5
percentage points compared with the second quarter of 2014. The
increase in gross margin percent was due to the impact of foreign
exchange rates on international inventories sold.
Operating expenses in the second quarter of 2015 were
$2.769 billion, a decline of
7 percent compared with the second quarter of 2014. Research
and development expenses decreased 5 percent to $1.169 billion, or 23.5 percent of revenue,
driven primarily by the favorable impact of foreign exchange rates.
Marketing, selling and administrative expenses decreased
8 percent to $1.600 billion, due to the favorable impact
of foreign exchange rates, cost reductions in the combined animal
health organization and ongoing cost-containment measures,
partially offset by marketing and selling expenses related to new
product launches.
Other income (expense) was income of $29.4 million in the second quarter of 2015,
compared with income of $18.3 million in the second quarter of
2014.
The effective tax rate decreased to 20.8 percent, compared
with 23.1 percent in the second quarter of 2014, due primarily
to a discrete tax benefit of approximately $24 million in 2015.
Net income increased 20 percent to $954.8
million, and earnings per share increased 22 percent to
$0.90, compared with $798.1 million and $0.74, respectively, in the second quarter of
2014. The increases were driven primarily by a decrease in
operating expenses and a lower effective tax rate, partially offset
by lower gross margin. Earnings per share benefited slightly from a
lower number of shares outstanding in the second quarter of 2015
compared with the second quarter of 2014.
For further detail, see the reconciliation below as well as the
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted
Information table later in this release.
|
Second
Quarter
|
|
|
2015
|
|
2014
|
% Change
|
Earnings per share
(reported)
|
$
|
0.56
|
|
|
$
|
0.68
|
|
(18)%
|
Novartis Animal
Health 2014 results
|
—
|
|
|
(.02)
|
|
|
Novartis Animal
Health inventory step-up
|
.05
|
|
|
—
|
|
|
Amortization of
intangible assets
|
.10
|
|
|
.08
|
|
|
Acquired in-process
research and development
|
.05
|
|
|
—
|
|
|
Net charge related to
repurchase of debt
|
.09
|
|
|
—
|
|
|
Asset impairment,
restructuring and other special charges
|
.05
|
|
|
—
|
|
|
Earnings per share
(non-GAAP)
|
$
|
0.90
|
|
|
$
|
0.74
|
|
22%
|
|
|
|
|
|
|
|
|
|
Numbers may not add
due to rounding.
|
|
|
|
|
|
|
|
|
Year-to-Date Results
For the first six months of 2015, worldwide revenue remained
relatively flat at $9.623 billion
compared with the same period in 2014. Reported net income and
earnings per share were $1.130 billion and $1.06, respectively. Net income and earnings per
share, on a non-GAAP basis, were $1.879 billion and $1.76, respectively.
For further detail, see the reconciliation below as well as the
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted
Information table later in this release.
|
Year-to-date
|
|
|
2015
|
|
2014
|
% Change
|
Earnings per share
(reported)
|
$
|
1.06
|
|
|
$
|
1.36
|
|
(22)%
|
Novartis Animal
Health 2014 results
|
—
|
|
|
(.05)
|
|
|
Novartis Animal
Health inventory step-up
|
.09
|
|
|
—
|
|
|
Amortization of
intangible assets
|
.20
|
|
|
.16
|
|
|
Acquired in-process
research and development
|
.20
|
|
|
.02
|
|
|
Net charge related to
repurchase of debt
|
.09
|
|
|
—
|
|
|
Asset impairment,
restructuring and other special charges
|
.12
|
|
|
—
|
|
|
Earnings per share
(non-GAAP)
|
$
|
1.76
|
|
|
$
|
1.48
|
|
19%
|
|
|
|
|
|
|
|
|
|
Numbers may not add
due to rounding.
|
|
|
|
|
|
|
|
|
Select Revenue
Highlights
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
Second
Quarter
|
|
|
|
Year-to-Date
|
|
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
Humalog®
|
$
|
654.3
|
|
|
$
|
700.1
|
|
|
(7)%
|
|
$
|
1,338.2
|
|
|
$
|
1,350.1
|
|
|
(1)%
|
Alimta
|
664.3
|
|
|
711.6
|
|
|
(7)%
|
|
1,237.4
|
|
|
1,343.6
|
|
|
(8)%
|
Cialis®
|
567.9
|
|
|
567.8
|
|
|
0%
|
|
1,106.2
|
|
|
1,100.2
|
|
|
1%
|
Humulin®
|
316.4
|
|
|
352.4
|
|
|
(10)%
|
|
632.1
|
|
|
668.6
|
|
|
(5)%
|
Forteo®
|
328.4
|
|
|
308.6
|
|
|
6%
|
|
621.4
|
|
|
608.9
|
|
|
2%
|
Cymbalta
|
274.1
|
|
|
401.3
|
|
|
(32)%
|
|
561.1
|
|
|
879.5
|
|
|
(36)%
|
Zyprexa®
|
253.7
|
|
|
243.8
|
|
|
4%
|
|
473.2
|
|
|
526.9
|
|
|
(10)%
|
Strattera®
|
191.8
|
|
|
197.4
|
|
|
(3)%
|
|
365.5
|
|
|
351.8
|
|
|
4%
|
Effient®
|
128.8
|
|
|
133.6
|
|
|
(4)%
|
|
250.6
|
|
|
252.9
|
|
|
(1)%
|
Trajenta®(a)
|
80.0
|
|
|
90.3
|
|
|
(11)%
|
|
162.4
|
|
|
167.1
|
|
|
(3)%
|
Cyramza
|
87.7
|
|
|
13.7
|
|
|
NM
|
|
155.2
|
|
|
13.7
|
|
|
NM
|
Evista
|
59.7
|
|
|
108.3
|
|
|
(45)%
|
|
126.5
|
|
|
258.3
|
|
|
(51)%
|
Animal
Health
|
840.8
|
|
|
601.2
|
|
|
40%
|
|
1,590.5
|
|
|
1,128.6
|
|
|
41%
|
Total
Revenue
|
4,978.7
|
|
|
4,935.6
|
|
|
1%
|
|
9,623.4
|
|
|
9,618.7
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Trajenta revenue includes
Jentadueto®
|
|
|
|
|
|
|
|
|
|
|
|
NM – not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
Humalog
For the second quarter of 2015, worldwide Humalog sales
decreased 7 percent to $654.3
million. Sales in the U.S. decreased 3 percent to
$399.7 million, driven primarily by
lower net effective selling prices. Sales outside the U.S.
decreased 11 percent to $254.6
million, driven by the unfavorable impact of foreign
exchange rates, partially offset by increased volume and higher
prices.
Alimta
For the second quarter of 2015, Alimta generated sales of
$664.3 million, a decline of
7 percent compared with the second quarter of 2014. U.S. sales
of Alimta increased 3 percent to $330.0
million, driven by higher prices. Sales outside the U.S.
decreased 14 percent to $334.3
million, driven by the unfavorable impact of foreign
exchange rates and, to a lesser extent, lower prices, partially
offset by increased volume.
Cialis
Cialis sales for the second quarter of 2015 remained flat at
$567.9 million. U.S. sales of Cialis
were $309.5 million, a 16 percent
increase compared with the second quarter of 2014, driven by higher
prices, partially offset by decreased volume. Sales of Cialis
outside the U.S. decreased 14 percent to $258.4 million, driven by the unfavorable impact
of foreign exchange rates, partially offset by increased
volume.
Humulin
Worldwide Humulin sales of $316.4
million for the second quarter of 2015 decreased 10 percent
compared with the second quarter of 2014. U.S. sales increased 4
percent to $188.1 million, driven
primarily by increased demand and higher prices. Sales outside the
U.S. decreased 25 percent to $128.3 million, driven by decreased volume,
primarily in Brazil, and the
unfavorable impact of foreign exchange rates.
Forteo
Second-quarter 2015 sales of Forteo were $328.4 million, a 6 percent increase compared
with the second quarter of 2014. U.S. sales of Forteo increased 13
percent to $144.6 million, driven by
higher prices, partially offset by decreased demand. Sales outside
the U.S. increased 2 percent to $183.8 million, as increased volume,
primarily due to wholesaler buying patterns in Japan, was largely offset by the unfavorable
impact of foreign exchange rates.
Cymbalta
For the second quarter of 2015, Cymbalta generated $274.1 million of sales, a decline of 32 percent
compared with the second quarter of 2014. U.S. sales of Cymbalta
decreased 64 percent to $40.5 million, due to the loss of U.S.
patent exclusivity in December 2013.
Sales of Cymbalta outside the U.S. were $233.6 million, a decline of 19 percent, driven
by the unfavorable impact of foreign exchange rates and the loss of
exclusivity in 2014. This was partially offset by increased volume
in Japan, primarily due to
wholesaler buying patterns.
Zyprexa
In the second quarter of 2015, Zyprexa sales totaled
$253.7 million, an increase of 4
percent compared with the second quarter of 2014. U.S. sales of
Zyprexa were $57.6 million.
Zyprexa sales outside the U.S. decreased 4 percent to $196.1 million, due to the unfavorable
impact of foreign exchange rates, partially offset by increased
volume in Japan, primarily due to
wholesaler buying patterns.
Strattera
During the second quarter of 2015, Strattera generated
$191.8 million of sales, a decline of
3 percent compared with the second quarter of 2014. U.S. sales
decreased 7 percent to $121.1
million, driven primarily by lower net effective selling
prices. Sales outside the U.S. increased 4 percent to $70.7 million, driven by increased volume,
primarily due to wholesaler buying patterns in Japan, partially offset by the unfavorable
impact of foreign exchange rates.
Effient
Effient sales were $128.8 million
in the second quarter of 2015, a decrease of 4 percent compared
with the second quarter of 2014. U.S. Effient sales increased 2
percent to $102.0 million, as higher
prices were largely offset by decreased demand. Sales outside the
U.S. decreased 19 percent to $26.8 million, driven by the unfavorable
impact of foreign exchange rates.
Evista
Evista sales for the second quarter of 2015 were $59.7 million, a decline of 45 percent compared
to the second quarter of 2014. U.S. sales of Evista decreased 75
percent to $13.7 million, due to the
loss of U.S. patent exclusivity in March
2014. Sales outside the U.S. decreased 14 percent to
$46.0 million, driven by the
unfavorable impact of foreign exchange rates.
Animal Health
In the second quarter of 2015, worldwide animal health sales
totaled $840.8 million, an increase
of 40 percent compared with the second quarter of 2014. U.S.
animal health sales increased 24 percent to $410.0 million, and animal health sales outside
the U.S. increased 60 percent to $430.8
million. The increases were primarily driven by the
inclusion of revenue from Novartis Animal Health.
Including the sales of Novartis Animal Health in 2014, worldwide
animal health sales decreased 4 percent, U.S. animal health sales
increased 1 percent and animal health sales outside the U.S.
decreased 9 percent. The increase in U.S. animal health sales was
driven by increased volume in companion animal products and to a
lesser extent higher prices, partially offset by decreased volume
in food animal products. The decrease in animal health sales
outside the U.S. was driven by the unfavorable impact of foreign
exchange rates, partially offset by increased volume, primarily in
food animal products, and to a lesser extent higher prices.
Including the sales of Novartis Animal Health in 2014 and excluding
the unfavorable impact of foreign exchange rates, worldwide animal
health sales increased 3 percent.
2015 Financial Guidance
The company has revised certain elements of its 2015 financial
guidance on a reported basis and on a non-GAAP basis. Full-year
2015 earnings per share are now expected to be in the range of
$2.20 to $2.30 on a reported basis.
On a non-GAAP basis, full-year 2015 earnings per share are now
expected to be in the range of $3.20 to
$3.30.
|
2015
Expectations
|
Earnings per share
(reported)
|
$2.20 to
$2.30
|
Amortization of
intangible assets including the impact of the transfer of Erbitux
rights
|
.39
|
Acquired in-process
research and development charges
|
.21
|
Net charge related to
repurchase of debt
|
.09
|
Asset impairment,
restructuring, integration and inventory step-up costs, primarily
related to the acquisition of Novartis Animal Health
|
.31
|
Earnings per share
(non-GAAP)
|
$3.20 to
$3.30
|
Amortization and inventory step-up costs associated with the
Novartis Animal Health and Erbitux rights acquisitions are subject
to final acquisition accounting adjustments. Numbers do not add due
to rounding.
The company now anticipates 2015 revenue of between $19.7 billion and $20.0 billion, reflecting solid
underlying performance for the first six months of the year,
including the launch trajectories of Jardiance, Trulicity and
Cyramza.
The company still expects that gross margin as a percent of
revenue will be approximately 74.5 percent on a reported
basis. On a non-GAAP basis, gross margin as a percent of revenue is
still expected to be approximately 78.0 percent, reflecting the
exclusion of inventory step-up costs associated with the
acquisition of Novartis Animal Health as well as amortization of
intangibles.
Marketing, selling, and administrative expenses on a reported
basis are still expected to be in the range of $6.4 billion to $6.7 billion. On a non-GAAP
basis, marketing, selling, and administrative expenses are still
expected to be in the range of $6.3 billion
to $6.6 billion. Research and development expenses are still
expected to be in the range of $4.7 billion
to $4.9 billion.
Other income (expense) is now expected to be in a range between
$50 million of expense and
$0 on a reported basis due to the net
charge related to the repurchase of debt. On a non-GAAP basis,
other income (expense) is now expected to be in a range between
$100 million and $150 million of
income, reflecting net gains on investments realized to date.
The 2015 tax rate is now expected to be approximately 14.5
percent on a reported basis, primarily due to the tax impact of the
net charge related to the repurchase of debt. The non-GAAP tax rate
is now expected to be approximately 21.0 percent. Both rates
assume a full-year 2015 benefit of the R&D tax credit and other
tax provisions up for extension. If these items are not extended,
the non-GAAP 2015 tax rate would be approximately 1.5 percentage
points higher.
Capital expenditures are still expected to be approximately
$1.3 billion.
The following table summarizes the company's 2015 financial
guidance:
|
2015
Guidance
|
|
Prior
|
|
Revised
|
Revenue
|
$19.5 to $20.0
billion
|
|
$19.7 to $20.0
billion
|
|
|
|
|
Gross Margin % of
Revenue (reported)
|
Approx.
74.5%
|
|
Approx.
74.5%
|
Gross Margin % of
Revenue (non-GAAP)
|
Approx.
78.0%
|
|
Approx.
78.0%
|
|
|
|
|
Marketing, Selling
& Admin (reported)
|
$6.4 to $6.7
billion
|
|
$6.4 to $6.7
billion
|
Marketing, Selling
& Admin (non-GAAP)
|
$6.3 to $6.6
billion
|
|
$6.3 to $6.6
billion
|
|
|
|
|
Research &
Development
|
$4.7 to $4.9
billion
|
|
$4.7 to $4.9
billion
|
|
|
|
|
Other
Income/(Expense) (reported)
|
$75 to $125
million
|
|
($50 million) to
$0
|
Other
Income/(Expense) (non-GAAP)
|
$75 to $125
million
|
|
$100 to $150
million
|
|
|
|
|
Tax Rate
(reported)
|
Approx.
16.5%
|
|
Approx.
14.5%
|
Tax Rate
(non-GAAP)
|
Approx.
21.5%
|
|
Approx.
21.0%
|
|
|
|
|
Earnings per share
(reported)
|
$2.21 to
$2.31
|
|
$2.20 to
$2.30
|
Earnings per share
(non-GAAP)
|
$3.10 to
$3.20
|
|
$3.20 to
$3.30
|
|
|
|
|
Capital
Expenditures
|
Approx. $1.3
billion
|
|
Approx. $1.3
billion
|
The company's 2015 financial guidance is subject to final
acquisition accounting adjustments for the acquisitions of Novartis
Animal Health and Erbitux rights.
Webcast of Conference Call
As previously announced, investors and the general public can
access a live webcast of the second-quarter 2015 financial results
conference call through a link on Lilly's website at www.lilly.com.
The conference call will begin at 9:00
a.m. Eastern Daylight Time (EDT) and will be available for
replay via the website.
Lilly is a global healthcare leader that unites caring with
discovery to make life better for people around the world. We were
founded more than a century ago by a man committed to creating
high-quality medicines that meet real needs, and today we remain
true to that mission in all our work. Across the globe, Lilly
employees work to discover and bring life-changing medicines to
those who need them, improve the understanding and management of
disease, and give back to communities through philanthropy and
volunteerism. To learn more about Lilly, please visit us at
www.lilly.com and
http://newsroom.lilly.com/social-channels. 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. The company's results may also be affected by such
factors as the timing of anticipated regulatory approvals and
launches of new products; market uptake of recently launched
products; competitive developments affecting current products; the
expiration of intellectual property protection for certain of the
company's products; the company's ability to protect and enforce
patents and other intellectual property; the impact of governmental
actions regarding pricing, importation, and reimbursement for
pharmaceuticals, including U.S. health care reform; regulatory
compliance problems or government investigations; regulatory
actions regarding currently marketed products; unexpected safety or
efficacy concerns associated with the company's products; issues
with product supply stemming from manufacturing difficulties or
disruptions; regulatory changes or other developments; changes in
patent law or regulations related to data-package exclusivity;
litigation involving current or future products; the extent to
which third-party indemnification obligations relating to product
liability litigation and similar matters will be performed;
unauthorized disclosure of trade secrets or other confidential data
stored in the company's information systems and networks; changes
in tax law and regulations; changes in inflation, interest rates,
and foreign currency exchange rates; asset impairments and
restructuring charges; changes in accounting standards promulgated
by the Financial Accounting Standards Board and the U.S. Securities
and Exchange Commission (SEC); acquisitions and business
development transactions and related integration considerations;
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-K 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)
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Cyramza® (ramucirumab, Lilly)
Effient® (prasugrel, Lilly)
Erbitux® (cetuximab, Bristol-Myers Squibb
Company)
Evista® (raloxifene hydrochloride, Lilly)
Forteo® (teriparatide of recombinant DNA origin
injection, Lilly)
Glyxambi® (empagliflozin/linagliptin, Boehringer
Ingelheim)
Humalog® (insulin lispro injection of recombinant DNA
origin, Lilly)
Humulin® (human insulin of recombinant DNA origin,
Lilly)
Jardiance® (empagliflozin, Boehringer Ingelheim)
Jentadueto® (linagliptin/metformin, Boehringer
Ingelheim)
Sentinel® (lufenuron and milbemycin oxime, Virbac)
Strattera® (atomoxetine hydrochloride, Lilly)
Synjardy® (empagliflozin/metformin, Boehringer
Ingelheim)
Trajenta® (linagliptin, Boehringer Ingelheim)
Trulicity™ (dulaglutide, Lilly)
Zyprexa® (olanzapine, Lilly)
Eli Lilly and Company Employment Information
|
June 30,
2015
|
December 31, 2014
|
Worldwide
Employees
|
41,120*
|
39,135
|
|
|
|
*Employment totals
reflect additions from the acquisition of Novartis Animal
Health.
|
Eli Lilly and
Company
|
|
|
Operating Results
(Unaudited) – REPORTED
|
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June 30,
|
|
|
June 30,
|
|
|
2015
|
2014
|
% Chg.
|
|
|
2015
|
2014
|
% Chg.
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
4,978.7
|
|
$
|
4,935.6
|
|
1%
|
|
$
|
9,623.4
|
|
$
|
9,618.7
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,218.4
|
|
|
1,189.7
|
|
2%
|
|
|
2,411.1
|
|
|
2,412.4
|
|
0%
|
Research and
development
|
|
1,169.5
|
|
|
1,195.4
|
|
(2)%
|
|
|
2,208.8
|
|
|
2,304.7
|
|
(4)%
|
Marketing, selling
and administrative
|
|
1,635.4
|
|
|
1,663.9
|
|
(2)%
|
|
|
3,158.9
|
|
|
3,148.8
|
|
0%
|
Acquired in-process
research
and development
|
|
80.0
|
|
|
—
|
|
NM
|
|
|
336.0
|
|
|
—
|
|
NM
|
Asset impairment,
restructuring and other special charges
|
|
72.4
|
|
|
—
|
|
NM
|
|
|
180.4
|
|
|
31.4
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
803.0
|
|
|
886.6
|
|
(9)%
|
|
|
1,328.2
|
|
|
1,721.4
|
|
(23)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(expense)
|
|
(16.2)
|
|
|
(1.9)
|
|
|
|
|
(35.7)
|
|
|
(5.3)
|
|
|
Net other income
(expense)
|
|
(107.1)
|
|
|
55.7
|
|
|
|
|
5.1
|
|
|
115.1
|
|
|
Other income
(expense)
|
|
(123.3)
|
|
|
53.8
|
|
NM
|
|
|
(30.6)
|
|
|
109.8
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
679.7
|
|
|
940.4
|
|
(28)%
|
|
|
1,297.6
|
|
|
1,831.2
|
|
(29)%
|
Income
taxes
|
|
78.9
|
|
|
206.9
|
|
(62)%
|
|
|
167.3
|
|
|
369.8
|
|
(55)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
600.8
|
|
$
|
733.5
|
|
(18)%
|
|
$
|
1,130.3
|
|
$
|
1,461.4
|
|
(23)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.56
|
|
$
|
0.68
|
|
(18)%
|
|
$
|
1.06
|
|
$
|
1.36
|
|
(22)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
0.50
|
|
$
|
0.49
|
|
2%
|
|
$
|
1.00
|
|
$
|
0.98
|
|
2%
|
Weighted-average
shares
outstanding (thousands) – diluted
|
|
1,065,584
|
|
|
1,076,418
|
|
|
|
|
1,066,335
|
|
|
1,076,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM – not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eli Lilly and
Company
|
|
|
Reconciliation of
GAAP Reported to Selected Non-GAAP Adjusted Information
(Unaudited)(a)
|
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
Three Months
Ended
June 30,
2015
|
|
Three Months
Ended
June 30,
2014
|
|
|
|
GAAP
Reported
|
Adjustments(c)
|
Non-GAAP
Adjusted
|
|
GAAP
Reported
|
Adjustments(d)
|
Non-GAAP
Adjusted
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
4,978.7
|
|
$
|
—
|
|
$
|
4,978.7
|
|
$
|
4,935.6
|
|
$
|
275.6
|
|
$
|
5,211.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,218.4
|
|
|
(184.5)
|
|
|
1,033.9
|
|
|
1,189.7
|
|
|
27.0
|
|
|
1,216.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses(b)
|
|
2,804.9
|
|
|
(35.8)
|
|
|
2,769.1
|
|
|
2,859.3
|
|
|
115.1
|
|
|
2,974.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired in-process
research and
development
|
|
80.0
|
|
|
(80.0)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment,
restructuring and other special charges
|
|
72.4
|
|
|
(72.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
(123.3)
|
|
|
152.7
|
|
|
29.4
|
|
|
53.8
|
|
|
(35.5)
|
|
|
18.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
78.9
|
|
|
171.3
|
|
|
250.3
|
|
|
206.9
|
|
|
33.3
|
|
|
240.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
600.8
|
|
$
|
354.1
|
|
$
|
954.8
|
|
$
|
733.5
|
|
$
|
64.6
|
|
$
|
798.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.56
|
|
$
|
0.33
|
|
$
|
0.90
|
|
$
|
0.68
|
|
$
|
0.06
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers may 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 company's non-GAAP measures adjust reported results to
exclude items that 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. Non-GAAP adjusted
amounts for 2014 assume the Novartis Animal Health acquisition was
completed on January 1, 2014.
Beginning in 2015, non-GAAP financial measures for periods
presented also exclude amortization of intangibles primarily
associated with costs of marketed products acquired or licensed
from third parties. 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 and marketing, selling and administrative
expenses.
(c) Adjustments to certain GAAP
reported measures for the three months ended June 30, 2015, include the following:
(Dollars in millions,
except per share data)
|
Amortization(i)
|
IPR&D(ii)
|
Inventory
step-up(iii)
|
Repurchase of
debt(iv)
|
Other specified
items(v)
|
Total
Adjustments
|
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Cost of
sales
|
(116.1)
|
|
—
|
|
(68.4)
|
|
—
|
|
—
|
|
(184.5)
|
|
|
|
|
|
|
|
|
Operating
expenses
|
(35.8)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(35.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired in-process
research and development
|
—
|
|
(80.0)
|
|
—
|
|
—
|
|
—
|
|
(80.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment,
restructuring and other special charges
|
—
|
|
—
|
|
—
|
|
—
|
|
(72.4)
|
|
(72.4)
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
—
|
|
—
|
|
—
|
|
152.7
|
|
—
|
|
152.7
|
|
|
|
|
|
|
|
|
Income
taxes
|
49.5
|
|
28.0
|
|
19.5
|
|
53.5
|
|
20.8
|
|
171.3
|
|
|
|
|
|
|
|
|
Net income
|
$
|
102.4
|
|
$
|
52.0
|
|
$
|
48.9
|
|
$
|
99.3
|
|
$
|
51.6
|
|
$
|
354.1
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.10
|
|
$
|
0.05
|
|
$
|
0.05
|
|
$
|
0.09
|
|
$
|
0.05
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
i. Exclude
amortization of intangibles primarily associated with costs of
marketed products acquired or licensed from third parties.
ii. Exclude costs
associated with upfront payments for acquired in-process research
and development projects acquired in a transaction other than a
business combination. These costs included a $50.0 million payment to Hanmi Pharma
related to an exclusive license and collaboration agreement for
Hanmi's oral Bruton's tyrosine kinase (BTK) inhibitor for the
treatment of autoimmune and other diseases and a $30.0 million payment to BioNTech AG related to a
research collaboration to discover novel cancer
immunotherapies.
iii. Exclude inventory step-up
costs associated with the acquisition of Novartis Animal
Health.
iv. Exclude a net charge
associated with the repurchase of $1.65
billion of debt.
v. Exclude costs
associated with restructuring to reduce the company's cost
structure, asset impairments, and integration costs associated with
the acquisition of Novartis Animal Health.
(d) Adjustments to certain GAAP reported
measures for the three months ended June 30,
2014, include the following:
(Dollars in millions,
except per share data)
|
Novartis Animal
Health(i)
|
Legacy
Amortization(ii)
|
Total
Adjustments
|
Revenue
|
$
|
275.6
|
|
$
|
—
|
|
$
|
275.6
|
|
|
|
|
|
Cost of
sales
|
122.8
|
|
(95.8)
|
|
27.0
|
|
|
|
|
|
Operating
expenses
|
151.4
|
|
(36.3)
|
|
115.1
|
|
|
|
|
|
|
|
|
Acquired in-process
research and development
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
Asset impairment,
restructuring and other special charges
|
—
|
|
—
|
|
—
|
|
|
|
|
|
Other income
(expense)
|
(35.5)
|
|
—
|
|
(35.5)
|
|
|
|
|
|
Income
taxes
|
(11.9)
|
|
45.2
|
|
33.3
|
|
|
|
|
|
Net income
|
$
|
(22.2)
|
|
$
|
86.8
|
|
$
|
64.6
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
(0.02)
|
|
$
|
0.08
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
Numbers may not add
due to rounding.
|
|
|
|
|
|
i. Inclusion of
the results of Novartis Animal Health as if the acquisition and the
financing for the acquisition had occurred as of January 1, 2014. Amounts reflect GAAP reported
measures of Novartis Animal Health, adjusted as follows:
- Exclude results associated with the Sentinel® canine
parasiticide franchise in the U.S., which was divested following
the closing of the acquisition
- Exclude amortization of intangibles
- Exclude integration and inventory step-up costs
- Other miscellaneous adjustments.
ii. Exclude legacy
amortization of intangibles primarily associated with costs of
marketed products acquired or licensed from third parties.
Eli Lilly and
Company
|
|
|
Reconciliation of
GAAP Reported to Selected Non-GAAP Adjusted Information
(Unaudited)(a)
|
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
Six Months
Ended
June 30,
2015
|
|
Six Months
Ended
June 30,
2014
|
|
|
|
GAAP
Reported
|
Adjustments(c)
|
Non-GAAP
Adjusted
|
|
GAAP
Reported
|
Adjustments(d)
|
Non-GAAP
Adjusted
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
|
9,623.4
|
|
$
|
—
|
|
$
|
9,623.4
|
|
$
|
9,618.7
|
|
$
|
527.4
|
|
$
|
10,146.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
2,411.1
|
|
|
(364.9)
|
|
|
2,046.2
|
|
|
2,412.4
|
|
|
57.9
|
|
|
2,470.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses(b)
|
|
5,367.7
|
|
|
(71.6)
|
|
|
5,296.1
|
|
|
5,453.5
|
|
|
242.7
|
|
|
5,696.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired in-process
research and development
|
|
336.0
|
|
|
(336.0)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Asset impairment,
restructuring and other special charges
|
|
180.4
|
|
|
(180.4)
|
|
|
—
|
|
|
31.4
|
|
|
(31.4)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
(30.6)
|
|
|
152.7
|
|
|
122.1
|
|
|
109.8
|
|
|
(55.7)
|
|
|
54.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
167.3
|
|
|
357.4
|
|
|
524.7
|
|
|
369.8
|
|
|
68.0
|
|
|
437.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
1,130.3
|
|
|
748.3
|
|
$
|
1,878.5
|
|
$
|
1,461.4
|
|
|
134.5
|
|
$
|
1,595.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
1.06
|
|
|
0.70
|
|
$
|
1.76
|
|
$
|
1.36
|
|
|
0.12
|
|
$
|
1.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers may 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 company's non-GAAP measures adjust reported results to
exclude items that 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. Non-GAAP adjusted
amounts for 2014 assume the Novartis Animal Health acquisition was
completed on January 1, 2014.
Beginning in 2015, non-GAAP financial measures for periods
presented also exclude amortization of intangibles primarily
associated with costs of marketed products acquired or licensed
from third parties. 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 and marketing, selling and administrative
expenses.
(c) Adjustments to certain GAAP
reported measures for the six months ended June 30, 2015, include
the following:
(Dollars in millions,
except per share data)
|
Amortization(i)
|
IPR&D(ii)
|
Inventory
step-up(iii)
|
Repurchase of
debt(iv)
|
Other specified
items(v)
|
Total
Adjustments
|
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Cost of
sales
|
(233.0)
|
|
—
|
|
(131.9)
|
|
—
|
|
—
|
|
(364.9)
|
|
|
|
|
|
|
|
|
Operating
expenses
|
(71.6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(71.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired in-process
research and development
|
—
|
|
(336.0)
|
|
—
|
|
—
|
|
—
|
|
(336.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment,
restructuring and other special charges
|
—
|
|
—
|
|
—
|
|
—
|
|
(180.4)
|
|
(180.4)
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
—
|
|
—
|
|
—
|
|
152.7
|
|
—
|
|
152.7
|
|
|
|
|
|
|
|
|
Income
taxes
|
99.9
|
|
117.6
|
|
37.6
|
|
53.5
|
|
48.8
|
|
357.4
|
|
|
|
|
|
|
|
|
Net income
|
$
|
204.7
|
|
$
|
218.4
|
|
$
|
94.3
|
|
$
|
99.3
|
|
$
|
131.6
|
|
$
|
748.3
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.20
|
|
$
|
0.20
|
|
$
|
0.09
|
|
$
|
0.09
|
|
$
|
0.12
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
i. Exclude
amortization of intangibles primarily associated with costs of
marketed products acquired or licensed from third parties.
ii. Exclude costs
associated with upfront payments for acquired in-process research
and development projects acquired in a transaction other than a
business combination. These costs included a $200.0 million payment to Pfizer following the
FDA decision allowing the resumption of the Phase III clinical
program for tanezumab, a $56.0
million charge associated with a collaboration with Innovent
to develop potential oncology therapies, a $50.0 million payment to Hanmi Pharma related to
an exclusive license and collaboration agreement for Hanmi's oral
Bruton's tyrosine kinase (BTK) inhibitor for the treatment of
autoimmune and other diseases, and a $30.0
million payment to BioNTech AG related to a research
collaboration to discover novel cancer immunotherapies.
iii. Exclude inventory step-up
costs associated with the acquisition of Novartis Animal
Health.
iv. Exclude a net charge
associated with the repurchase of $1.65
billion of debt.
v. Exclude costs
associated with restructuring to reduce the company's cost
structure, asset impairments, and integration costs associated with
the acquisition of Novartis Animal Health.
(d) Adjustments to certain GAAP reported
measures for the six months ended June 30,
2014, include the following:
(Dollars in millions,
except per share data)
|
Novartis Animal
Health(i)
|
Legacy
Amortization(ii)
|
Other specified
items(iii)
|
Total
Adjustments
|
Revenue
|
$
|
527.4
|
|
$
|
—
|
|
$
|
—
|
|
$
|
527.4
|
|
|
|
|
|
|
Cost of
sales
|
246.1
|
|
(188.2)
|
|
—
|
|
57.9
|
|
|
|
|
|
|
Operating
expenses
|
315.4
|
|
(72.7)
|
|
—
|
|
242.7
|
|
|
|
|
|
|
|
|
|
|
Acquired in-process
research and development
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Asset impairment,
restructuring and other special charges
|
—
|
|
—
|
|
(31.4)
|
|
(31.4)
|
|
|
|
|
|
|
Other income
(expense)
|
(55.7)
|
|
—
|
|
—
|
|
(55.7)
|
|
|
|
|
|
|
Income
taxes
|
(30.8)
|
|
89.4
|
|
9.4
|
|
68.0
|
|
|
|
|
|
|
Net income
|
$
|
(59.1)
|
|
$
|
171.6
|
|
$
|
22.0
|
|
$
|
134.5
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
(0.05)
|
|
$
|
0.16
|
|
$
|
0.02
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers may not add
due to rounding.
|
|
|
|
|
|
i. Inclusion of
the results of Novartis Animal Health as if the acquisition and the
financing for the acquisition had occurred as of January 1, 2014. Amounts reflect GAAP reported
measures of Novartis Animal Health, adjusted as follows:
- Exclude results associated with the Sentinel® canine
parasiticide franchise in the U.S., which was divested following
the closing of the acquisition
- Exclude amortization of intangibles
- Exclude integration and inventory step-up costs
- Other miscellaneous adjustments.
ii. Exclude legacy
amortization of intangibles primarily associated with costs of
marketed products acquired or licensed from third parties.
iii. Exclude costs primarily
associated with restructuring to reduce the company's cost
structure.
Refer to: Lauren Zierke;
lauren_zierke@lilly.com; (317) 277-6524 (Media)
Philip Johnson;
johnson_philip_l@lilly.com; (317) 655-6874 (Investors)
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To view the original version on PR Newswire,
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SOURCE Eli Lilly and Company