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Lilly delivers upbeat earnings forecast for 2013

New products will offset generic competition for Alimta, Zyprexa, Cymbalta and Evista

Eli Lilly headquarters

Eli Lilly posted a positive take on its likely financial performance in 2013, saying revenues from newer products will help offset revenue lost to generic competition.

The pharma company also reiterated its predictions for 2012 but said the expected positive impact of the American Taxpayer Relief Act of 2012, which will introduce additional R&D tax credits amongst other measures, will not be felt until this year.

Lilly is currently battling to defend its $3.5bn cancer product Alimta (pemetrexed) from generic competition – having already seen sales of its former $4.5bn-a-year schizophrenia blockbuster Zyprexa (olanzapine) plummet after it lost patent protection in 2011.

And further challenges are on the horizon as generic competition will emerge for big-selling antidepressant Cymbalta (duloxetine) later this year – placing another $5bn at risk of generic erosion – and $1bn osteoporosis drug Evista (raloxifene) in early 2014.

Lilly expects to report revenues of $22.6bn-$23.4bn in 2013 – slightly ahead of analyst expectations – with 2014 likely to see revenues of "at least $20bn", according to the firm's chief financial officer Derica Rice.

In 2014, which analysts expect will be a much more challenging year for Lilly, Rice said the company predicts net income to be at least $3bn and operating cash flow to be $4bn or more.

Current products such as Alimta and Cymbalta, as well as insulin product Humalog (insulin lispro) and Cialis (tadalafil) for erectile dysfunction, will support growth this year, said Lilly, as will expanded sales in Japan and emerging markets.

Humalog's $1.4bn in sales are also at risk once US patent protection falls later this year, but Lilly has said it does not believe it will succumb quickly to generic competition as complexities in its manufacturing process make it more expensive to produce and harder for generic drugmakers to make a profit on sales.

Meanwhile, a pipeline that includes 13 projects in phase III is expected to help the firm "bridge [its] current period of patent expirations and return to sustainable growth", chief executive John Lechleiter told analysts late last week.

Lilly is scheduled to report its 2012 results on January, 29.

7th January 2013

From: Sales

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