Lilly First-Quarter Profit Falls on Icos Purchase

Cialis developer stated that profit fell 39 percent on costs from acquiring Icos Corp. The outcomes outnumber estimates values and Eli Lilly & Co. increase its annual forecast on greater than expected sales of its psychiatric medicines.

Today Eli Lilly & Co. said that first-quarter net income fell to $509 million, or 47 cents a share. Without charges from Icos, which was acquired by Lilly to get the full control on the Cialis erectile dysfunction medicine market, earnings were 84 cents a share. This outnumbered the 79-cent average predictions, sending Lilly’s shares higher.

The company noticed 10 percent sales increase of its top seller schizophrenia drug Zyprexa, and 89 percent for the antidepressant Cymbalta. Eli Lilly & Co., which is based in Indianapolis made the price higher on those drugs this year, however it is spending more money on marketing and has been looking for a new indications. What’s more, the company also doesn’t face generic competition on a well known product this year.

In a telephone interview today Robert Hazlett, an analyst with BMO Capital Markets in New York, said: “It was a solid quarter across the board on the top-line and we expect to see more of the same, given that there is minimal potential patent expiration risk”.

The company increases its annual incomes expectations excluding certain charges to $3.30 to $3.40 from $3.25 to $3.35. Lilly also announced a second-quarter dividend of 43 cents per share, the exact sum it paid out in the first quarter.

Incomes in the quarter rose from $3.7 billion to $4.2 billion.

Shares Rise

Lilly’s shares climbed $1.52, or 2.7 percent, to $58.40 as of 4:02 p.m. in New York Stock Exchange composite trading. Also by past 12 months 10 percent increase could be noticed in its shares. That trails a 17 percent rose in the Standard & Poor’s 500 Pharmaceutical, Biotechnology and Life Science Index, which has 25 members.

John Lechleiter, Lilly’s president and chief operating officer, said “Looking ahead for the next nine months, we feel good enough about our business prospects to raise our guidance by a nickel,” Further in a interview he added: “Clearly there are a lot of things we are excited about with regards to our existing products and new products. We’re going to continue to expect to see good solid growth from Cymbalta.”

The seventh-largest prescription medicines maker - Eli Lilly & Co. - bought Icos for $2.3 billion in January, to get the full control over the world’s second-biggest-selling erectile dysfunction treatment medicine, Cialis, which the companies had shared. The company also spends $385 million in the first quarter to license a new experimental diabetes drug from OSI Pharmaceuticals Inc.

Zyprexa

After the 5 percent price increase, Zyprexa’s sales increase 10 percent to $1.1 billion. Cymbalta sales reached 89 percent rose to $442 million.

BMO’s Hazlett said that Zyprexa sales increase is just a benefit from raising the drug price, it puts patients on higher, more expensive doses and gives fewer discounts under the Medicare Part D drug benefit program for the poor, disabled and elderly people.

Sales of Zyprexa and similar antipsychotic medicines makes up the $15 billion market, also more frequent use by adolescents and the elderly helped this score happened, said doctors and analysts of the market. The elderly get the prescriptions for the medicines to unapproved treat dementia from Alzheimer’s disease and teenagers get the medicines prescribed to treat states of depression, autism and hyperactivity.

The company is going to ask U.S. FDA this year for approval its four-week inject able version of Zyprexa.

Eli Lilly & Co. has been sued by at least six states, including Louisiana, West Virginia, Mississippi, Pennsylvania, Alaska and New Mexico, on behalf of Medicaid programs, they are looking for reimbursement of money spent on Zyprexa. They said that drug developer didn’t enclose information about the risk and side effects of using this drug to treat conditions for which they weren’t approved.

Byetta

Lilly’s inject able treatment for Type - 2 diabetes known as Byetta achieved 7 percent income rise to $147 million from the fourth quarter of 2006. The new competition from Merck & Co.’s Januvia and the company’s difficulties to produce enough medicine to meet demand are responsible for slower sales grow rate than last year, according to Oppenheimer’s Henry.

He said: “One of the bigger issues there is, how much Byetta they have there to sell?” and added: “They have been having supply issues. It is starting to clear up finally and the product is still growing. Just not as fast as it was.”

Cialis

Cialis, the new erectile dysfunction drug brought in $193.1 million. According to Tim Anderson, who is an analyst with Prudential Equity Group in Menlo Park, California and his last week note to clients new policy where Medicare, the U.S. health insurance program for the elderly and poor, stopped subscribing the medicine this year negatively impacted on the revenue from this drug.

Lechleiter said that the company will have data from a large-scale trial of its hopefulness experimental medicine - prasugral.

According to Lilly’s expectations Prasugrel may become 10 times as effective as Plavix, Bristol-Myers Squibb Co’s drug. $6 billion made by Plavix in 2006 was the world’s second-biggest-selling medicine just after Lipitor, Pfizer Inc.’s cholesterol pill.

Eli Lilly & Co. has also in plans to get an approval for Cymbalta for fibromyalgia, disease which causes muscles weakness and fatigue, Lechleiter added.

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