Eli Lilly Predicts Sharp Drop in Profit in 2012 as Patents Expire

By FOXBusiness

Eli Lilly (NYSE:LLY) on Thursday predicted a sharp drop in fiscal 2012 results when a number of its largest products are expected to lose patent exclusivity.

The Indianapolis-based drug maker said it expects to meet or exceed its current earnings guidance in the range of $4.30 to 4.35 a share in fiscal 2011, but sees earnings down to between $3.10 and $3.20 a share next year.

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Analysts polled by Thomson Reuters forecast a profit of $4.33 a share in 2011 and $3.60 in 2012.

“2012 is an important year for Lilly, having entered the period when we face patent expirations on some of our largest products, most notably Zyprexa late last year and Cymbalta in the U.S. at the end of 2013," said Dr. John Lechleiter, Lilly's chief executive.

The company said it has been preparing for these changes for a number of years and has initiatives in place, such as replenishing its pipeline, to return to sustainable growth after 2014.

It is on track to meet or exceed the mid-term minimum financial performance outlined in June from now through 2014, with revenue of at least $20 billion and net income of at least $3 billion on an annual basis, according to CFO Derica Rice.

Next year, revenue is slated to come in between $21.8 billion and $22.8 billion. The loss in sales from Zyprexa will be partially offset by growth in Cymbalta, Cialis, Humalog, Humulin and Forteo, Lilly said. The Street is looking for sales of $22.7 billion.