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Lilly to post 2008 loss on ImClone costs
2008-12-11
INDIANAPOLIS - Eli Lilly and Co. said Thursday its $6.5 billion ImClone acquisition will wipe out its 2008 profit and dent next year's earnings as well. But the drugmaker's leaders assured analysts that their product pipeline boasts unprecedented strength, and the ImClone purchase and other deals made this year will pay off. "All these moves strengthen our business and our pipeline, and we intend to continue this aggressive pace," Chief Executive John Lechleiter said during opening remarks webcast from the company's annual investor update in New York City. The company's stock rose 3 percent, or $1.04, to $36.05 at midday Thursday. Indianapolis-based Lilly closed the ImClone purchase in November, and the company said Thursday it expects an overall loss of between $1.56 and $2.06 per share for 2008. That includes a charge of between $4.05 and $4.50 per share for ImClone and a charge of $1.33 per share Lilly expects to pay to resolve an investigation into the marketing of its biggest-selling drug, the anti-psychotic Zyprexa. Without those one-time items, Lilly reaffirmed its full-year 2008 guidance of $3.97 to $4.02 per share, compared with last year's earnings of $3.54 per share. A Thomson Reuters poll says analysts, who typically exclude one-time charges, expect a profit of $4.01 per share. Lilly on Thursday also unveiled a 2009 earnings forecast of between $4 and $4.25 per share. That includes an ImClone impact of between 30 and 35 cents per share due to factors like added research and development costs and interest expense from debt issued for the deal. Lilly's range falls short of analyst 2009 profit expectations of $4.26 per share. But company spokesman Mark Taylor said most of those estimates have not factored in the full impact of the ImClone deal. He said they likely will move closer to the company's range. Chief Financial Officer Derica Rice said the company could see profit growth ranging from 8 percent to 15 percent next year, excluding ImClone costs. But he cautioned that a strengthening of the dollar, "unprecedented in speed and magnitude" may dampen sales growth. Lechleiter touted Lilly's pipeline by noting that the drugmaker has an unprecedented 59 molecules in various stages of clinical testing on humans. Lilly expects to launch a product per year between 2009 and 2012 and two products per year by 2013. The company said it expects to start selling the blood thinner prasugrel in the first half of 2009. But officials declined to offer a timetable for hearing from the Food and Drug Administration, which has twice delayed making a decision on it. Lilly also is still waiting to hear from the FDA on a longer-lasting, injectible version of Zyprexa, which the company expects to boost sales. Regulators delivered a ""not-approvable" letter to Lilly earlier this year for the injection, to which Lilly said it has submitted a "complete response." Lechleiter told analysts he was confident in the drugmaker's pipeline, and, in response to an audience question, he said he believed Lilly's best path forward was to retain its independence. "There's absolutely no evidence that these large-scale mergers do anything other than assuage short-term pain," he said.
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