|Eli Lilly CEO John Lechleiter|
Few had high hopes for Eli Lilly ($LLY) moving into the first quarter. The company faced its fair share of problems last year, struggling with slumping sales and patent expirations for two of its bestselling products. But Lilly is celebrating a bright point, bringing in Q1 2015 numbers boosted by the success of its recently acquired animal health unit.
Indianapolis, IN-based Lilly earned 87 cents per share in the first quarter of 2015, topping analysts' estimates by more than 10 cents. The jump was partly fueled by animal health sales, after Lilly snatched up Novartis' ($NVS) veterinary unit in January for $5.4 billion. The purchase created the second-largest animal health company behind Zoetis ($ZTS), with sales of $750 million in Q1--a 42% hop from last year, Lilly said in a statement.
Overall, Lilly revenue slid by 1% compared with the same period last year, to $4.64 billion. And despite U.S. price increases averaging 10%, pharma sales came in dead flat, at $3.9 billion worldwide.
Obviously, it wasn't all smooth sailing for the company last quarter, as Lilly continued to suffer from generic competition for its antidepressant Cymbalta and osteoporosis drug Evista. Cymbalta sales slid 40% to $287 million, while Evista sales fell 55% to $66.8 million. Net income dropped 27% to $530 million year-over-year.
Tried-and-true products and newer launches helped offset those declines. The company's fast-acting insulin, Humalog, netted $684 million in sales during the first quarter, a 5% jump. And while the launch for Type 2 diabetes drug Trulicity "appears fairly slow," the launch for Lilly's new oncology drug Cyramza "looks quite strong," Evercore ISI analyst Mark Schoenebaum said in a note to investors. The drug brought in $68 million in Q1, setting the stage for growth in the coming year.
With high hopes for its diabetes franchise this year, Lilly needs Trulicity to kick into gear. It has a new addition to help as well: Lilly and partner Boehringer Ingelheim recently won FDA approval for a combo med, Glyxambi, which combines the SGLT2 med Jardiance (empagliflozin) with Tradjenta (linagliptin), Lilly's older DPP-4 drug. Another combo, Synjardy, scored a positive opinion from the European Medicines Agency (EMA); it marries Jardiance with the standard diabetes therapy metformin.
"While our first-quarter revenue reflects the impact of foreign exchange headwinds and the lingering effects of U.S. patent expirations for Cymbalta and Evista, Lilly remains on track to return to growth in 2015 driven by excellent progress in our innovation-based strategy," CEO John Lechleiter said in a statement. "Recent new product launches, the growing success of our late-stage pipeline, and the recent acquisition of Novartis Animal Health reinforce our confidence in our future."
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