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Lilly 2013 profit forecast tops expectations

Published on NewsOK Modified: January 4, 2013 at 5:25 pm •  Published: January 4, 2013
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INDIANAPOLIS (AP) — Eli Lilly and Co. unveiled a better-than-expected 2013 earnings forecast Friday, in part because the pharmaceutical company expects growth from several established drugs to help make up for revenue lost to generic competition.

The Indianapolis drug developer saw sales for its all-time best-selling drug, the antipsychotics Zyprexa, crater in 2012 after it lost U.S. patent protection. Lilly will take another hit next December when it loses patent protection for its current top seller, the antidepressant Cymbalta.

But company executives told analysts Friday they still expect Cymbalta and another product that loses patent protection in 2013, the insulin Humalog, to help drive revenue growth along with products like the cancer treatment Alimta and the erectile dysfunction drug Cialis.

Lilly also expects more growth from Japan, developing countries and its animal health business.

All told, the drugmaker forecast 2013 adjusted earnings of between $3.75 and $3.90 per share on $22.6 billion to $23.4 billion in revenue.

That topped analyst expectations, on average, for per-share earnings of $3.72, according to FactSet. Analysts also expected $22.87 billion in revenue.

Company shares climbed $1.84, or 3.7 percent, to close at $51.56 Friday, while broader indexes rose less than 1 percent.

Lilly said it expects operating expenses will be flat or drop slightly compared with 2012, and that was slightly better than what Edward Jones analyst Judson Clark expected.

He called Lilly's 2013 forecast "a pleasant surprise," but he also noted that plenty of long-term concerns remain. Lilly won't feel the brunt of the Cymbalta patent loss until 2014, and Clark expects the company's earnings to shrink then. What remains to be seen, he said, is whether the drugmaker is willing to preserve its dividend and cut expenses enough to tame that loss.

"We think the real question marks are in 2014," he said.

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