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Eli Lilly Q2 profit beats estimates, lifts FY19 forecast

Eli Lilly and Company (NYSE: LLY) swung to a profit in the second quarter of 2019 from a loss last year, helped by lower acquired in-process research and development charges, the Elanco exchange offer, and share repurchases. The results exceeded analysts’ expectations. Further, the company raised its earnings guidance for the full year 2019.

Net income was $1.33 billion or $1.44 per share compared to a loss of $259.9 million or $0.25 per share in the previous year quarter. Adjusted earnings increased by 1% to $1.50 per share.

Revenue rose by 1% to $5.64 billion driven by 6% volume growth. Key growth products launched since 2014, including Trulicity, Taltz, Jardiance, Verzenio, Basaglar, Olumiant, Cyramza, and Emgality contributed 13 percentage points to revenue growth and represented about 43% of total revenue.

Eli Lilly Q2 profit beats estimates, lifts FY19 forecast

The company said its portfolio of newer medicines reached more patients in the second quarter, allowing it to grow revenue despite headwinds, including the expiration of the US patent for Cialis. Eli Lilly is continuing to make significant investments in its business to ensure the success of its recent product launches.

Looking ahead into fiscal 2019, the company lifted its earnings guidance to the range of $8.58 to $8.68 per share from the prior range of $8.57 to $8.67 per share, and its adjusted earnings outlook to the range of $5.67 to $5.77 per share from the previous range of $5.60 to $5.70 per share. Revenue is still anticipated to be in the range of $22 billion to $22.5 billion.

For the full year, revenue growth is predicted to be driven by volume from key growth products including Trulicity, Taltz, Basaglar, Jardiance, Verzenio, Cyramza, and Olumiant. Revenue growth is also expected to benefit from the recent launch of Emgality and could benefit from the potential approval and launch of other medicines in 2019.

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For the second quarter, revenue in the US was essentially flat at $3.25 billion as increased volume of 5% was almost entirely offset by lower realized prices. Revenue outside the US rose by 2% to $2.38 billion driven by increased volume of 9%, which was primarily from key growth products, including Trulicity, Olumiant, Taltz, Jardiance, and Verzenio.

Trulicity revenue jumped by 32% on increased demand and higher volume. However, Humalog revenue fell by 12% due to lower realized prices due to higher contracted rebates, increased coverage gap funding requirements in Medicare Part D, and the impact of patient affordability programs.

Alimta revenue rose by 4% on increased demand and the impact of buying patterns in the US. Taltz revenue soared by 61% on increased demand, while Forteo revenue declined by 17% due to decreased demand and lower realized prices. Basaglar revenue jumped by 44% on increased demand and higher realized prices while Cialis revenue plunged by 63% due to decreased demand due to generic competition.

Shares of Eli Lilly ended Monday’s regular session up 0.42% at $108.72 on the NYSE. Following the earnings release, the stock rose over 1% in the premarket session.

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