China and Japan were unexpected bright spots for Eli Lilly ($LLY) as it provided an upbeat forecast to the end of the decade on the July 26 earnings call in what can now be seen as a swan song for chief John Lechleiter as he moves to relinquish the roles as chairman, president and CEO at the end of 2016.
On the first quarter earnings call Lechleiter voiced caution on the Japan market--its largest outside the U.S. and a consistent performer--as a series of reimbursement price cuts took hold.
The company did win a nod for two new indications of Cyramza (ramucirumab) in the second quarter for metastatic colorectal and non-small cell lung cancer as well as approval for Taltz (ixekizumab) to treat psoriasis and psoriatic arthritis, Lechleiter noted.
But the macro picture on prices in Japan had Lechleiter "very concerned" in the first quarter, which may have been a bit too worried as volumes offset the impact of the cuts going by the figures presented by Phil Johnson, head of Investor Relations
"In Japan, pharma revenue increased 21% in total, driven by mid-teens volume growth and an 11% benefit from a stronger yen, partially offset by a 7% negative price effect from the latest biannual price cuts," Johnson said on the call.
"On a constant currency basis, Japan pharma revenue increased 10%. This performance growth was attributable to a number of products, led by Cyramza, but also including Cymbalta (duloxetine), Strattera (atomoxetine), Basaglar (insulin glargine), Trulicity (dulaglutide) and Tradjenta (linagliptin)."
The company also expects to file for rheumatoid arthritis candidate baricitinib (LY3009104) in Japan next year, Lechleiter said.
And while Johnson had more downbeat news on emerging markets overall--revenues down 3% in the second quarter on a stronger dollar--China provided a bright spot after a 14% drop in the first quarter, or 9% on a constant-currency basis.
"Our pharma revenue in China increased 15%, or 23% on a constant currency basis," Johnson said on the call.
"This quarter's growth rate did benefit from customer buying patterns in both last year's quarter and this quarter. We estimate that underlying demand for our products in China increased 5% in the second quarter."
- here's the release
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