Business

Eli Lilly quarterly profit jumps 33% on strong Trulicity demand

Revenue from psoriasis treatment Taltz also contributes to profit growth

Eli Lilly has been on a deal-making spree in recent years in a bid to increase products and sales in core franchises.

Thu Jan 30 2020 - 13:58

Eli Lilly reported a higher-than-expected quarterly profit on Thursday, helped by strong demand for its diabetes drug, Trulicity, and psoriasis treatment, Taltz.

Shares of the company, which reiterated its full-year adjusted profit forecast, rose 1.5 per cent in trading before the opening bell.

The drugmaker has been trying to boost revenue by expanding its pipeline and boosting sales of its newer drugs such as Trulicity and Taltz as older medicines including erectile dysfunction treatment, Cialis, loses market share to cheaper generic versions.

Sales of Trulicity, which accounted for about a fifth of total sales in the fourth quarter, rose nearly 31 per cent to $1.21 billion, above expectations of $1.15 billion, according to analysts polled by Refinitiv. The company said the drug’s sales were slightly hurt by higher rebates that drugmakers offer to middlemen such as pharmacy benefit managers to make sure patients have access to their products. Sales of Taltz rose about 37 per cent to $420.1 million and beat estimates of $395.75 million.

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Cantor Fitzgerald analyst Louise Chen said in a client note that strong revenue from newer medicines as well as cost controls helped Lilly to invest in the business and still deliver earnings growth.

Deal spree

Lilly has been on a deal-making spree in recent years in a bid to increase products and sales in core franchises. With this month’s $1.1 billion deal to buy skin disease specialist Dermira, Lilly will gain access to Dermira’s experimental treatment for atopic dermatitis, which is in late-stage testing. The acquisition helped the drugmaker slightly raise its 2020 revenue forecast to between $23.7 billion and $24.2 billion as it expects to benefit from the addition of Dermira’s Qbrexza, an approved medicated cloth to treat excessive armpit sweating. Net income rose 33 per cent to $1.50 billion, or $1.64 per share from a year earlier when it took a $329.4 million charge. Excluding items, the company earned $1.73 per share, beating average analysts’ estimate of $1.52 per share, according to IBES estimates from Refinitiv. Revenue rose 8.5 per cent to $6.11 billion, surpassing expectations of $5.91 billion. – Reuters

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