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Lilly’s income drops 5 per cent

Eli Lilly & Company has reported a drop in net income of 5 per cent in the pharmaceutical company's financial results for the third quarter of 2011 due to increased operating expenses

Eli Lilly & Company has reported a drop in net income of 5 per cent in the pharmaceutical company's financial results for the third quarter of 2011.

The company made $1.24bn during the period in 2011 compared to $1.30bn in 2010.

In contrast, sales were up by 9 per cent to $6.15bn, despite antipsychotic Zyprexa (olanzapine) facing its first generic competition.

However, this improved revenue was cancelled out by operating expenses such as a $45m cost due to the mandatory pharmaceutical manufacturers fee associated with US healthcare reform, as well as a 13 per cent increase in marketing, selling and administrative expenses and a 5 per cent increase in R&D spending.

Lilly said this was mainly due to the recently-announced diabetes collaboration with Boehringer Ingelheim, which includes late-stage clinical trial costs.

Products that performed well included Cymbalta (duloxetine), which had a revenue increase of 29 per cent to make $1.07bn during the quarter due mainly to higher demand in international markets.

The insulin, Humalog, also achieved high growth, with revenue up 20 per cent.

Based on the company's performance, Lilly said it has updated certain elements of its 2011 financial guidance. It now expects full-year 2011 earnings per share to be in the range of $3.89 to $3.94.

20th October 2011

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