Eli Lilly sees downturn in 2nd-qtr quarter EPS, but sales rise 9%

There were mixed second-quarter 2011 financial results from US drug major Eli Lilly (NYSE: LLY), which posted 9% growth in sales to $6.25 billion for the quarter, with reported net income down 11% to $1.20 billion and earnings per share down 12%, impacted by higher R&D and marketing expenses. On a non-GAAP basis, net income was down 4% at $1.32 billion, with EPS 5% lower at $1.18. Nevertheless, the figures beat consensus estimates from analyst surveyed by FactSet, who forecast EPS of $1.19 on revenues of $6.01 billion.

US health care reform reduced earnings per share in the second quarters of 2011 and 2010 by approximately $0.12 and $0.05 per share, respectively, on both a reported and non-GAAP basis, the company said.

Like many other drug majors, Lilly is facing generic competition for some of its best selling drugs, most notably its $5 billion-a-year schizophrenia drug Zyprexa (olanzapine) which loses patent exclusivity in October. Its antidepressant Cymbalta (duloxetine) faces generics in mid-2013, with copy versions of osteoporosis drug Evista coming to the market in 2014. Cancer drug Gemzar (gemcitabine) lost patent protection last November, and second-quarter sales slumped 62% to $112 million.