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Profits down for Eli Lilly

In its second quarter financial results, Eli Lilly & Company has recorded a net income decrease of 11 per cent, although revenue was up nine per cent to $6.25bn

In its second quarter financial results, Eli Lilly & Company has recorded a net income decrease of 11 per cent. The company made $1.20bn over the period in 2011 compared to $1.35bn in 2010.

Revenue for the company grew by nine per cent, however, totalling $6.25bn for 2011.

Despite this sales growth, rising operating expenses had a negative effect on the company's earnings, with marketing, sales and administrative expenses increasing by 16 per cent.

Much of the increase in costs was due to Eli Lilly's diabetes collaboration with Boehringer Ingelheim, announced in January 2011.

Higher rebates and administration expenses caused by healthcare reforms in the US also had an effect on the company's operations.

Products that performed well for the company in the time period included antipsychotic Zyprexa (olanzapine), which remained Eli Lilly's largest-selling drug with sales of $1.41bn. This was an increase of 12 per cent from last year, although the drug is due to lose patent protection in October 2011.

Cymbalta (duloxetine) for depression; Alimta (pemetrexed) for non-small cell lung cancer, and type 1 diabetes treatment Humalog (insulin lispro) also had strong quarters with double digit growth.

As well as announcing the quarter performance, the company commented on its prospects for the rest of 2011, with president and CEO, Dr John C Lechleiter anticipating several new launches  from the 70 potential new medicines in clinical development.

Based on the company's prospects, Lilly has revised its financial guidance for the year and now expects total revenue growth for 2011 to be in the mid-single digits rather than its initial anticipation of low-single digit growth.

This assumes 'rapid and severe erosion' of Zyprexa sales due to generic competition, with Lilly expecting strong growth of other products to compensate.

21st July 2011

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