INDIANAPOLIS, April 26, 2016 /PRNewswire/ -- Eli Lilly and
Company (NYSE: LLY) today announced financial results for the first
quarter of 2016.
|
|
|
|
|
$ in millions, except
per share data
|
First
Quarter
|
%
|
|
2016
|
|
2015
|
Change
|
Revenue –
Reported
|
$
|
4,865.1
|
|
$
|
4,644.7
|
|
5%
|
Net Income –
Reported
|
440.1
|
|
529.5
|
|
(17)%
|
EPS –
Reported
|
0.41
|
|
0.50
|
|
(18)%
|
|
|
|
|
|
Net Income –
non-GAAP
|
882.3
|
|
923.7
|
|
(4)%
|
EPS –
non-GAAP
|
0.83
|
|
0.87
|
|
(5)%
|
Certain financial information for 2016 and 2015 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 periods.
Non-GAAP measures exclude the items described in the reconciliation
tables later in the release. The company's 2016 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.
"Revenue growth in the first quarter reflects substantial
progress in launching new products, including Trulicity, Cyramza,
Jardiance, Basaglar and Portrazza," said John C. Lechleiter, Ph.D., Lilly's chairman,
president and chief executive officer. "In addition, we recently
launched Taltz in the U.S., following its FDA approval last month.
Several other potential products are currently under regulatory
review, including olaratumab and baricitinib. Clearly, our
innovation strategy is paying off, for the benefit of patients as
well as shareholders."
Key Events Over the Last Three Months
Commercial
- Following approval by the U.S. Food and Drug Administration
(FDA), the company launched Taltz (ixekizumab) injection 80 mg/mL
in the U.S. for the treatment of moderate-to-severe plaque
psoriasis in adult patients who are candidates for systemic therapy
or phototherapy.
- In Europe, the company
launched Cyramza® (ramucirumab) for locally advanced or
metastatic non-small cell lung cancer (NSCLC) and for metastatic
colorectal cancer (CRC).
- Also in Europe, following
approval by the European Commission, the company launched
Portrazza™ (necitumumab), in combination with gemcitabine and
cisplatin, as the first biologic for the treatment of patients with
locally advanced or metastatic epidermal growth factor receptor
expressing squamous NSCLC who have not received prior chemotherapy
for this condition.
Regulatory
- Following a positive opinion from the European Medicines
Agency's (EMA) Committee for Medicinal Products for Human Use
(CHMP), the European Commission approved Taltz for the treatment of
moderate-to-severe plaque psoriasis in adults who are candidates
for systemic therapy.
- The company submitted olaratumab to both the FDA and the EMA
for soft tissue sarcoma.
- Elanco Animal Health announced the FDA approval of Imrestor™
(pegbovigrastim injection) for the reduction in the incidence of
clinical mastitis in dairy cows. Imrestor is a non-antibiotic
therapy, the first product of its kind for the dairy industry.
Clinical
- The primary endpoint for the EXPEDITION3 clinical trial, a
Phase 3 study of solanezumab in people with mild Alzheimer's
dementia, was changed from co-primary endpoints of cognition and
function to a single primary endpoint of cognition. Functional
outcomes will be evaluated as key secondary endpoints.
- In collaboration with AstraZeneca, the company announced:
- AMARANTH, a Phase 2/3 study of AZD3293, an oral beta secretase
cleaving enzyme (BACE) inhibitor currently in development as a
potential treatment for early Alzheimer's disease, will continue to
Phase 3 of the Phase 2/3 seamless trial.
- A new Phase 3 trial for AZD3293, named DAYBREAK, will study the
safety and efficacy of AZD3293 in people with mild Alzheimer's
dementia. DAYBREAK will begin enrolling participants in the third
quarter of 2016.
- The Boehringer Ingelheim Lilly Diabetes Alliance announced
plans to conduct two outcome trials investigating the diabetes
medicine Jardiance® (empagliflozin) for the treatment of
people with chronic heart failure. The trials are targeted to begin
within the next 12 months and are planned to enroll people with
chronic heart failure both with and without type 2 diabetes.
Business Development/Other
- The United Kingdom (UK) High
Court decided the Alimta® (pemetrexed disodium) vitamin
regimen patent would not presently be infringed by Actavis
marketing pemetrexed trometamol in the UK, France, Italy
and Spain with instructions to
dilute the product only with dextrose solution. Lilly intends
to appeal this ruling.
- Elanco Animal Health licensed rights to Aratana's
Galliprant® (grapiprant tablets), an FDA-approved
therapeutic for the control of pain and inflammation associated
with osteoarthritis in dogs. The agreement grants Elanco exclusive
rights to develop, manufacture, market and commercialize Galliprant
globally, and co-promote the product with Aratana in the U.S.
- As part of its previously announced share repurchase program,
the company repurchased approximately $300
million of stock in the first quarter of 2016.
First-Quarter Reported Results
In the first quarter of 2016, worldwide revenue was $4.865 billion, an increase of 5 percent
compared with the first quarter of 2015. Revenue increased
7 percent due to increased volume and 1 percent due to
higher realized prices, partially offset by 3 percent due to the
unfavorable impact of foreign exchange rates. The increase in
worldwide volume was due to several products, including
Trulicity® and Cyramza, as well as Erbitux®
due to the transfer of commercialization rights in North America to Lilly in the fourth quarter
of 2015. Revenue in the U.S. increased 16 percent to
$2.556 billion, primarily driven
by increased volume for several pharmaceutical products including
Trulicity, Erbitux and Humalog® and, to a lesser extent,
higher realized prices primarily for Cialis®. Revenue
outside the U.S. decreased 5 percent to $2.310 billion, driven by the unfavorable impact
of foreign exchange rates and, to a lesser extent, the loss of
exclusivity for Cymbalta® in Europe in 2014, partially offset by increased
volume for several pharmaceutical products, primarily Cyramza.
Gross margin increased 3 percent to $3.542 billion in the first quarter of 2016
compared with the first quarter of 2015. Gross margin as a percent
of revenue was 72.8 percent, a decrease of 1.5 percentage points
compared with the first quarter of 2015. The decline in gross
margin percent was primarily due to a lower benefit from foreign
exchange rates on international inventories sold and, to a lesser
extent, the transfer of Erbitux commercialization rights in
North America, partially offset by
2015 inventory step-up costs related to the acquisition of Novartis
Animal Health.
Operating expenses in the first quarter of 2016, defined as the
sum of research and development and marketing, selling and
administrative expenses, were $2.695
billion, an increase of 5 percent compared with the
first quarter of 2015. Research and development expenses increased
17 percent to $1.221 billion, or
25.1 percent of revenue, driven primarily by higher late-stage
clinical development costs, including $55.0
million in milestone payments to Incyte Corporation for the
regulatory submissions of baricitinib in the U.S. and Europe. Marketing, selling and administrative
expenses decreased 3 percent to $1.474 billion, as the favorable impact of
foreign exchange rates and lower litigation expenses were partially
offset by expenses related to new products.
There were no acquired in-process research and development
charges in the first quarter of 2016. In the first quarter of 2015,
the company recognized acquired in-process research and development
charges totaling $256.0 million.
These charges included a $200.0
million payment to Pfizer Inc. (Pfizer) following an FDA
decision allowing the resumption of Phase 3 clinical trials for
tanezumab and a $56.0 million payment
to Innovent Biologics Inc. (Innovent) associated with a
collaboration to develop potential oncology therapies.
In the first quarter of 2016, the company recognized asset
impairment, restructuring and other special charges of $131.4 million. The charges are associated with
asset impairments related to the closure of an animal health
manufacturing facility in Ireland
and integration costs related to the acquisition of Novartis Animal
Health. In the first quarter of 2015, the company recognized asset
impairment, restructuring and other special charges of $108.0 million, primarily related to
integration, severance costs, and intangible asset impairments due
to product rationalization resulting from the acquisition of
Novartis Animal Health.
Operating income in the first quarter of 2016 was $715.8 million, an increase of 36 percent
compared with the first quarter of 2015, driven by lower acquired
in-process research and development charges and higher gross
margin, partially offset by higher operating expenses.
Other income (expense) was an expense of $149.0 million in the first quarter of 2016,
compared with income of $92.7 million
in the first quarter of 2015. Other expense during the first
quarter of 2016 was driven by a $203.9
million charge related to the impact of the Venezuelan
financial crisis, including the significant deterioration of the
bolívar. Other income during the first quarter of 2015 reflected a
favorable legal judgment and net gains on investments.
The effective tax rate was 22.4 percent in the first quarter of
2016, compared with 14.3 percent in the first quarter of 2015. The
first-quarter 2016 effective tax rate reflects the tax effect of
the non-deductible charge related to the impact of the Venezuelan
financial crisis, including the significant deterioration of the
bolívar, and certain asset impairment, restructuring and other
special charges, as well as an increased percentage of earnings in
higher-tax jurisdictions, partially offset by a net discrete tax
benefit of approximately $50 million
and the benefit of certain U.S. tax provisions, including the
R&D tax credit, reinstated for 2016. The first-quarter 2015
effective tax rate reflects the tax impact of acquired in-process
research and development charges and asset impairment,
restructuring and other special charges. The first-quarter 2015
effective tax rate does not include the benefit of certain
then-expired U.S. tax provisions, including the R&D tax
credit.
In the first quarter of 2016, net income decreased
17 percent to $440.1 million, and earnings per share
decreased 18 percent to $0.41,
compared with $529.5 million and
$0.50, respectively, in the first
quarter of 2015. The declines in net income and earnings per share
were driven by the charge related to the impact of the Venezuelan
financial crisis, including the significant deterioration of the
bolívar, and higher income taxes, partially offset by higher
operating income.
First-Quarter 2016 Non-GAAP Measures
First-quarter 2016 gross margin increased 2 percent to
$3.713 billion. Gross margin as
a percent of revenue was 76.3 percent, a decline of 1.9 percentage
points compared with the first quarter of 2015. The decline in
gross margin percent was primarily due to a lower benefit from
foreign exchange rates on international inventories sold.
Operating income decreased $85.7
million, or 8 percent, to $1.020
billion in the first quarter of 2016, driven by higher
operating expenses, partially offset by higher gross margin.
Other income (expense) was income of $54.9 million in the first quarter of 2016,
compared with income of $92.7 million in the first quarter of 2015.
The decline in other income was driven by lower net gains on
investments.
The first-quarter 2016 effective tax rate of 17.9 percent
decreased 5.0 percentage points compared with the first quarter of
2015. The first-quarter 2016 effective tax rate reflects a net
discrete tax benefit of approximately $50
million and the benefit of certain U.S. tax provisions,
including the R&D tax credit, reinstated for 2016, partially
offset by the impact of an increased percentage of earnings in
higher-tax jurisdictions. The first-quarter 2015 effective tax rate
does not include the benefit of certain then-expired U.S. tax
provisions, including the R&D tax credit.
Net income decreased 4 percent to $882.3
million, and earnings per share decreased 5 percent to
$0.83, compared with $923.7 million and $0.87, respectively, in the first quarter of
2015. The declines in net income and earnings per share were driven
by lower operating income and lower other income, partially offset
by lower income taxes.
For further detail of non-GAAP measures, see the reconciliation
below as well as the Reconciliation of GAAP Reported to Selected
Non-GAAP Adjusted Information table later in this press
release.
|
First
Quarter
|
|
|
2016
|
|
2015
|
% Change
|
Earnings per share
(reported)
|
$
|
0.41
|
|
$
|
0.50
|
(18)%
|
Amortization of
intangible assets
|
.11
|
|
.10
|
|
Asset impairment,
restructuring and other special charges
|
.11
|
|
.07
|
|
Acquired in-process
research and development
|
—
|
|
.15
|
|
Venezuela
charge
|
.19
|
|
—
|
|
Novartis Animal
Health inventory step-up
|
—
|
|
.04
|
|
Earnings per share
(non-GAAP)
|
$
|
0.83
|
|
$
|
0.87
|
(5)%
|
Numbers may not add
due to rounding.
|
|
|
|
|
Select Revenue
Highlights
|
|
|
|
|
|
(Dollars in
millions)
|
First
Quarter
|
|
|
|
Established
Pharmaceutical
Products
|
2016
|
|
2015
|
|
% Change
|
|
Humalog
|
$
|
606.3
|
|
|
$
|
684.0
|
|
|
(11)%
|
|
Cialis
|
576.7
|
|
|
538.3
|
|
|
7%
|
|
Alimta
|
564.2
|
|
|
573.0
|
|
|
(2)%
|
|
Humulin®
|
356.4
|
|
|
315.7
|
|
|
13%
|
|
Forteo®
|
318.6
|
|
|
293.0
|
|
|
9%
|
|
Zyprexa®
|
212.8
|
|
|
219.5
|
|
|
(3)%
|
|
Cymbalta
|
198.7
|
|
|
287.0
|
|
|
(31)%
|
|
Strattera®
|
188.1
|
|
|
173.7
|
|
|
8%
|
|
Erbitux
|
168.1
|
|
|
88.2
|
|
|
90%
|
|
Effient®
|
131.5
|
|
|
121.8
|
|
|
8%
|
|
New
Pharmaceutical
Products
|
|
|
|
|
|
|
Trulicity
|
143.6
|
|
|
18.3
|
|
|
NM
|
|
Cyramza
|
131.0
|
|
|
67.5
|
|
|
94%
|
|
Jardiance(a)
|
38.2
|
|
|
19.3
|
|
|
99%
|
|
Basaglar®
|
10.9
|
|
|
—
|
|
|
NM
|
|
Portrazza
|
1.7
|
|
|
—
|
|
|
NM
|
|
Animal
Health
|
754.6
|
|
|
749.8
|
|
|
1%
|
|
Total
Revenue
|
4,865.1
|
|
|
4,644.7
|
|
|
5%
|
|
|
|
|
|
|
|
|
(a)
Jardiance includes Glyxambi® and
Synjardy®
NM – not
meaningful
|
Established Pharmaceutical Products
Humalog
For the first quarter of 2016, worldwide Humalog revenues
decreased 11 percent compared with the first quarter of 2015 to
$606.3 million. Revenues in the U.S.
decreased 14 percent to $361.6
million, driven by lower realized prices, partially offset
by increased demand. The decrease in realized prices experienced
during the first quarter of 2016 was related to changes in
estimates for rebates and discounts resulting in the overall
decrease in revenues. The company does not expect this trend to
continue throughout the year. Revenues outside the U.S. decreased 7
percent to $244.7 million, driven by
the unfavorable impact of foreign exchange rates.
Cialis
Cialis revenues for the first quarter of 2016 increased 7
percent compared with the first quarter of 2015 to $576.7 million. U.S. revenues of Cialis were
$324.0 million, a 31 percent increase
compared with the first quarter of 2015, driven primarily by higher
realized prices. Revenues of Cialis outside the U.S. decreased 13
percent to $252.7 million, driven by
the unfavorable impact of foreign exchange rates and decreased
volume.
Alimta
For the first quarter of 2016, Alimta generated revenues of
$564.2 million, a decline of
2 percent compared with the first quarter of 2015. U.S.
revenues of Alimta increased 4 percent to $263.1 million, driven primarily by wholesaler
buying patterns. Revenues outside the U.S. decreased 6 percent to
$301.1 million, driven by the
unfavorable impact of foreign exchange rates and, to a lesser
extent, lower realized prices, partially offset by increased
volume. This increased volume benefited from increased clinical
trial demand, which may not continue.
Humulin
Worldwide Humulin revenues for the first quarter of 2016
increased 13 percent compared with the first quarter of 2015 to
$356.4 million. U.S. revenues
increased 34 percent to $240.1
million, driven by higher realized prices and, to a lesser
extent, increased demand. The increase in realized prices resulted
from a change in estimate of a government rebate. Revenues outside
the U.S. decreased 15 percent to $116.3 million, driven by decreased volume,
primarily due to the loss of a government contract in Brazil, and the unfavorable impact of foreign
exchange rates.
Forteo
First-quarter 2016 revenues of Forteo were $318.6 million, a 9 percent increase compared
with the first quarter of 2015. U.S. revenues of Forteo increased
21 percent to $148.1 million, driven
by higher realized prices. Revenues outside the U.S. remained flat
at $170.5 million as lower
realized prices and the unfavorable impact of foreign exchange
rates were essentially offset by increased volume.
New Pharmaceutical Products
Trulicity
First-quarter 2016 revenues of Trulicity were $143.6 million. U.S. revenues of Trulicity were
$119.4 million, driven by the
acceleration in growth of the GLP-1 market and increased share of
market for Trulicity. Revenues of Trulicity outside the U.S. were
$24.2 million.
Cyramza
For the first quarter of 2016, Cyramza revenues were
$131.0 million. U.S. revenues of
$71.6 million were negatively
affected by increased competitive pressure in the NSCLC indication
and positively affected by uptake in the CRC indication. Revenues
outside the U.S. were $59.4 million,
primarily due to strong uptake for the gastric cancer indication in
Japan.
Jardiance
The company's revenues for Jardiance for the first quarter of
2016 were $38.2 million. U.S.
revenues were $29.7 million, driven
by increased share of market within the growing SGLT2 class.
Revenues outside the U.S. were $8.5
million. Since Jardiance is part of the Boehringer Ingelheim
Lilly Diabetes Alliance, Lilly reports as revenue a portion of
Jardiance's gross margin.
Basaglar
First-quarter 2016 revenues of Basaglar, which has launched in
multiple countries outside the U.S., were $10.9 million, driven by early uptake in
Japan and various European
countries.
Portrazza
For the first quarter of 2016, Portrazza revenues were
$1.7 million. Portrazza launched in
the U.S. in December 2015.
Animal Health
In the first quarter of 2016, worldwide animal health revenues
totaled $754.6 million, an increase
of 1 percent compared with the first quarter of 2015. U.S.
animal health revenues increased 10 percent to $392.4 million, due to increased revenues of both
companion animal products and food animal products. Animal health
revenues outside the U.S. decreased 8 percent to $362.2 million, primarily due to the
unfavorable impact of foreign exchange rates. Excluding the
unfavorable impact of foreign exchange rates, worldwide animal
health revenues increased 5 percent.
2016 Financial Guidance
The company has revised certain elements of its 2016 financial
guidance on a reported basis and on a non-GAAP basis. Full-year
2016 earnings per share are now expected to be in the range of
$2.68 to $2.78 on a reported basis.
On a non-GAAP basis, full-year 2016 earnings per share are now
expected to be in the range of $3.50 to
$3.60.
|
2016
Expectations
|
|
Earnings per share
(reported)
|
$2.68 to
$2.78
|
|
Amortization of
intangible assets
|
.42
|
|
Asset impairment,
restructuring and other special charges, including
Novartis Animal Health integration costs and closure
of an animal
health manufacturing facility in Ireland
|
.21
|
|
Venezuela
charge
|
.19
|
|
Earnings per share
(non-GAAP)
|
$3.50 to
$3.60
|
|
|
|
|
Amortization
associated with the transfer of Erbitux commercialization rights
is
subject to final acquisition accounting adjustments.
|
|
|
Numbers may not add
due to rounding.
|
|
|
The company now expects 2016 revenue of between $20.6 billion and $21.1 billion, reflecting
recent movement in foreign exchange rates. Excluding the impact of
foreign exchange rates, the company expects revenue growth from a
number of established products including Humalog, Trajenta, Cialis,
Forteo, Strattera, Erbitux, and animal health products, as well as
higher revenues from new products including Cyramza, Trulicity,
Jardiance, Portrazza and Basaglar. The company expects this revenue
growth to be partially offset by lower revenue from Alimta as a
result of increased competitive pressures.
Gross margin percentage is now expected to be approximately 73
percent on a reported basis, and 76 percent on a non-GAAP basis,
reflecting recent movement in foreign exchange rates.
Marketing, selling and administrative expenses are now expected
to be in the range of $6.1 billion to $6.3
billion. Research and development expenses are now expected
to be in the range of $4.9 billion to $5.1
billion.
Other income (expense) is now expected to be in a range between
$200 million and $125 million of
expense on a reported basis, reflecting the impact of the
first-quarter charge of $203.9
million due to the Venezuelan financial crisis, including
the significant deterioration of the bolívar. On a non-GAAP basis,
other income (expense) is still expected to be in a range between
$0 and $75 million of income.
On a non-GAAP basis, the 2016 tax rate is now expected to be
approximately 21 percent, reflecting the impact of a discrete tax
benefit in the first quarter.
The following table summarizes the company's 2016 financial
guidance:
|
2016
Guidance
|
|
|
Prior
|
|
Revised
|
|
Revenue
|
$20.2 to $20.7
billion
|
|
$20.6 to $21.1
billion
|
|
|
|
|
|
|
Gross Margin % of
Revenue (reported)
|
Approx.
74%
|
|
Approx.
73%
|
|
Gross Margin % of
Revenue (non-GAAP)
|
Approx.
77%
|
|
Approx.
76%
|
|
|
|
|
|
|
Marketing, Selling
& Administrative
|
$6.0 to $6.2
billion
|
|
$6.1 to $6.3
billion
|
|
|
|
|
|
|
Research &
Development
|
$4.8 to $5.0
billion
|
|
$4.9 to $5.1
billion
|
|
|
|
|
|
|
Other
Income/(Expense) (reported)
|
$0 to $75
million
|
|
$(200 million) to
$(125 million)
|
|
Other
Income/(Expense) (non-GAAP)
|
$0 to $75
million
|
|
Unchanged
|
|
|
|
|
|
|
Tax Rate
(reported)
|
Approx.
21.0%
|
|
Unchanged
|
|
Tax Rate
(non-GAAP)
|
Approx.
22.5%
|
|
Approx.
21.0%
|
|
|
|
|
|
|
Earnings per share
(reported)
|
$2.83 to
$2.93
|
|
$2.68 to
$2.78
|
|
Earnings per share
(non-GAAP)
|
$3.45 to
$3.55
|
|
$3.50 to
$3.60
|
|
|
|
|
|
|
Capital
Expenditures
|
Approx. $1.1
billion
|
|
Unchanged
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Webcast of Conference Call
As previously announced, investors and the general public can
access a live webcast of the first-quarter 2016 financial results
conference call through a link on Lilly's website at
https://investor.lilly.com/events.cfm. The conference call will
begin at 9:00 a.m. Eastern Daylight
Time (EDT) on Tuesday, April 26,
2016, 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," "anticipate," 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 that pipeline products will succeed in clinical
testing, will receive the necessary clinical and manufacturing
regulatory approvals or 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)
Basaglar® (insulin glargine injection, Lilly)
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Cyramza® (ramucirumab, Lilly)
Effient® (prasugrel, Lilly)
Erbitux® (cetuximab, Lilly)
Forteo® (teriparatide of recombinant DNA origin
injection, Lilly)
Galliprant® (grapiprant, Aratana)
Glyxambi® (empagliflozin/linagliptin, Boehringer
Ingelheim)
Humalog® (insulin lispro injection of recombinant DNA
origin, Lilly)
Humulin® (human insulin of recombinant DNA origin,
Lilly)
Imrestor™ (pegbovigrastim injection, Lilly)
Jardiance® (empagliflozin, Boehringer Ingelheim)
Portrazza™ (necitumumab, Lilly)
Strattera® (atomoxetine hydrochloride, Lilly)
Synjardy® (empagliflozin/metformin, Boehringer
Ingelheim)
Taltz® (ixekizumab, Lilly)
Trajenta® (linagliptin, Boehringer Ingelheim)
Trulicity® (dulaglutide, Lilly)
Zyprexa® (olanzapine, Lilly)
Eli Lilly and Company
Employment Information
|
|
|
|
March 31,
2016
|
December 31,
2015
|
Worldwide
Employees
|
41,500
|
41,275
|
Eli Lilly and
Company
|
Operating
Results (Unaudited) – REPORTED
|
(Dollars in millions,
except per share data)
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2015
|
|
% Chg.
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
4,865.1
|
|
$
|
4,644.7
|
|
5%
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,323.0
|
|
|
1,192.7
|
|
11%
|
|
Research and
development
|
|
1,221.0
|
|
|
1,039.3
|
|
17%
|
|
Marketing, selling
and administrative
|
|
1,473.9
|
|
|
1,523.5
|
|
(3)%
|
|
Acquired in-process
research
and development
|
|
—
|
|
|
256.0
|
|
NM
|
|
Asset impairment,
restructuring and
other special charges
|
|
131.4
|
|
|
108.0
|
|
22%
|
|
|
|
|
|
|
|
|
Operating
income
|
|
715.8
|
|
|
525.2
|
|
36%
|
|
|
|
|
|
|
|
|
Net interest income
(expense)
|
|
(19.2)
|
|
|
(19.5)
|
|
|
|
Net other income
(expense)
|
|
(129.8)
|
|
|
112.2
|
|
|
|
Other income
(expense)
|
|
(149.0
|
|
|
92.7
|
|
NM
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
566.8
|
|
|
617.9
|
|
(8)%
|
|
Income
taxes
|
|
126.7
|
|
|
88.4
|
|
43%
|
|
|
|
|
|
|
|
|
Net income
|
$
|
440.1
|
|
$
|
529.5
|
|
(17)%
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.41
|
|
$
|
0.50
|
|
(18)%
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
0.51
|
|
$
|
0.50
|
|
2%
|
|
Weighted-average
shares
outstanding (thousands) –
diluted
|
|
1,063,075
|
|
|
1,067,036
|
|
|
|
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
March 31,
2016
|
|
Three Months
Ended
March 31, 2015
|
|
|
|
GAAP
Reported
|
Adjustments(c)
|
Non-GAAP
Adjusted
|
|
GAAP
Reported
|
Adjustments(d)
|
Non-GAAP
Adjusted
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
4,865.1
|
|
$
|
—
|
|
$
|
4,865.1
|
|
$
|
4,644.7
|
|
$
|
—
|
|
$
|
4,644.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,323.0
|
|
|
(170.6)
|
|
|
1,152.4
|
|
|
1,192.7
|
|
|
(180.4)
|
|
|
1,012.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses(b)
|
|
2,694.9
|
|
|
(1.9)
|
|
|
2,693.0
|
|
|
2,562.8
|
|
|
(35.8)
|
|
|
2,527.0
|
|
Acquired
in-process
research and
development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256.0
|
|
|
(256.0)
|
|
|
—
|
|
Asset
impairment,
restructuring and other
special charges
|
|
131.4
|
|
|
(131.4)
|
|
|
—
|
|
|
108.0
|
|
|
(108.0)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
(149.0)
|
|
|
203.9
|
|
|
54.9
|
|
|
92.7
|
|
|
—
|
|
|
92.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
126.7
|
|
|
65.6
|
|
|
192.3
|
|
|
88.4
|
|
|
186.0
|
|
|
274.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
440.1
|
|
$
|
442.2
|
|
$
|
882.3
|
|
$
|
529.5
|
|
$
|
394.2
|
|
$
|
923.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
–
diluted
|
$
|
0.41
|
|
$
|
0.42
|
|
$
|
0.83
|
|
$
|
0.50
|
|
$
|
0.37
|
|
$
|
0.87
|
|
|
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. 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 March 31,
2016, include the following:
|
|
|
(Dollars in millions,
except per
share data)
|
Amortization(i)
|
Venezuela
charge(ii)
|
Other
specified
items(iii)
|
Total
Adjustments
|
|
|
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
(170.6)
|
—
|
—
|
(170.6)
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
(1.9)
|
—
|
—
|
(1.9)
|
|
|
Acquired in-process
research
and development
|
—
|
—
|
—
|
—
|
|
|
Asset
impairment,
restructuring and other
special charges
|
—
|
—
|
(131.4)
|
(131.4)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
—
|
203.9
|
—
|
203.9
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
54.1
|
—
|
11.5
|
65.6
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
118.4
|
$
|
203.9
|
$
|
119.9
|
$
|
442.2
|
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.11
|
$
|
0.19
|
$
|
0.11
|
$
|
0.42
|
|
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 charge
related to the impact of the Venezuelan financial crisis, including
the significant deterioration of the bolívar.
|
|
iii.
|
Exclude charges
associated with asset impairments related to the closure of an
animal health manufacturing facility in Ireland and integration
costs for Novartis Animal Health.
|
(d)
|
Adjustments to
certain GAAP reported measures for the three months ended March 31,
2015, include the following:
|
|
|
(Dollars in millions,
except per share data)
|
Amortization(i)
|
IPR&D
(ii)
|
Inventory
step-up(iii)
|
Other
specified
items(iv)
|
Total
Adjustments
|
|
|
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
(116.9)
|
—
|
(63.5)
|
—
|
(180.4)
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
(35.8)
|
—
|
—
|
—
|
(35.8)
|
|
|
Acquired in-process
research
and development
|
—
|
(256.0)
|
—
|
—
|
(256.0)
|
|
|
Asset impairment,
restructuring and other
special charges
|
—
|
—
|
—
|
(108.0)
|
(108.0)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
—
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
50.4
|
89.6
|
18.1
|
27.9
|
186.0
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
102.3
|
$
|
166.4
|
$
|
45.4
|
$
|
80.1
|
$
|
394.2
|
|
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.10
|
$
|
0.15
|
$
|
0.04
|
$
|
0.07
|
$
|
0.37
|
|
|
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 include a $200.0 million
payment to Pfizer following an FDA decision allowing the resumption
of Phase 3 clinical trials for tanezumab and a $56.0 million
charge associated with a collaboration with Innovent to develop
potential oncology therapies.
|
|
iii.
|
Exclude inventory
step-up costs associated with the acquisition of Novartis Animal
Health.
|
|
iv.
|
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.
|
Refer
to:
|
Molly McCully;
mccully_molly@lilly.com; (317) 478-5423 (Media)
|
|
Philip Johnson;
johnson_philip_l@lilly.com; (317) 655-6874 (Investors)
|
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SOURCE Eli Lilly and Company