Eli Lilly is weighing the sale of an animal health business that the drugmaker once touted as key in helping it overcome the loss of patent protection for some top-selling drugs.
Lilly said Tuesday that alternatives for its Elanco Animal Health business also include an initial public offering or a merger. The drugmaker also might still keep the business, which brought in nearly $741 million in revenue during the third quarter.
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Chairman and CEO David Ricks said that Elanco, which the company has bulked up with acquisitions in recent years, has been an important growth driver, and it is now large enough for Lilly "to consider a variety of options to maximize future value."
The drugmaker expects to provide an update by the middle of next year.
Eli Lilly and Co. lost patent protection for top selling drugs like the antipsychotics Zyprexa and the antidepressant Cymbalta a few years ago, which exposed those drugs to competition from cheaper generic versions. Lilly officials had touted the company's animal health business, as well as sales from new drugs and overseas revenue, among the factors that would help the company overcome the revenue drop.
The Indianapolis company reported Tuesday that third-quarter net income sank 29 percent to $555.6 million, due in part to restructuring costs and other one-time charges.
Last month, Lilly said it would cut about 3,500 positions as part of a plan to close some research sites and trim fixed costs.
Adjusted earnings totaled $1.05 per share in the third quarter. Worldwide revenue grew 9 percent to $5.66 billion, helped by established products like the insulin Humalog as well as newer drugs.
Analysts expected earnings of $1.03 per share on $5.52 billion in revenue, according to Zacks Investment Research.
Lilly also raised its forecast for 2017. The drugmaker now expects adjusted earnings to range from $4.15 to $4.25 per share, up from a forecast of $4.10 to $4.20 that it made in July.
Analysts expect $4.16 per share, according to FactSet.
Lilly shares jumped more than 2 percent, or $2.07, to $89.25 in early morning trading Tuesday.
Company shares have climbed 19 percent since the beginning of the year, while the Standard & Poor's 500 index has increased 15 percent.
Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on LLY at https://www.zacks.com/ap/LLY