Eli Lilly and Company (LLY, Financial) filed Quarterly Report for the period ended 2009-06-30.
Eli Lilly and Company discovers develops manufactures and sells products in one significant business segment -pharmaceutical products. The company directs its research efforts primarily toward the search for products to diagnose prevent and treat human diseases. The company also conducts research to find products to treat diseases in animals and to increase the efficiency of animal food production. Eli Lilly and Company has a market cap of $40.27 billion; its shares were traded at around $35.05 with a P/E ratio of 7.9 and P/S ratio of 2. The dividend yield of Eli Lilly and Company stocks is 5.6%. Eli Lilly and Company had an annual average earning growth of 4.4% over the past 10 years. GuruFocus rated Eli Lilly and Company the business predictability rank of 4.5-star.
In January 2009, we reached resolution with the Office of the U.S. Attorney for the Eastern District of Pennsylvania (EDPA), and the State Medicaid Fraud Control Units of 36 states and the District of Columbia, of an investigation related to our U.S. marketing and promotional practices with respect to Zyprexa. We recorded a charge of $1.42 billion for this matter in the third quarter of 2008. In 2009, we paid substantially all of this amount, as required by the settlement agreements. In addition, in October 2008, we reached a settlement with 32 states and the District of Columbia related to a multistate investigation brought under various state consumer protection laws, under which we paid $62.0 million. However, we have been served with lawsuits brought by Alaska, Arkansas, Connecticut, Idaho, Louisiana, Minnesota, Mississippi, Montana, New Mexico, Pennsylvania, South Carolina, Utah, and West Virginia, alleging that Zyprexa caused or contributed to diabetes or high blood-glucose levels, and that we improperly promoted the drug and seeking to recover the costs paid for Zyprexa through Medicaid and other drug-benefit programs, as well as the costs alleged to have been incurred and that will be incurred to treat Zyprexa-related illnesses. The Alaska case was settled in March 2008 for a payment of $15.0 million, plus terms designed to ensure, subject to certain limitations and conditions, that Alaska is treated as favorably as certain other states that may settle with us in the future over similar claims. We are in advanced discussions with the attorneys general for several states that were not part of the EDPA settlement, seeking to resolve their Zyprexa-related claims, and we have reached settlement with the state of West Virginia. In the second quarter of 2009, we incurred a pretax charge of $105.0 million, representing the currently probable and estimable exposures in connection with the states claims. Discussions are ongoing, and it is possible that additional charges may occur in the future. The cases in Connecticut and South Carolina have been set for trial in 2009; the trial in Pennsylvania is scheduled for 2010.
Revenue for the second-quarter and the first six months of 2009 increased 3 percent and 4 percent to $5.29 billion and $10.34 billion, respectively, and was driven primarily by the increase in net product sales related to the collective growth of Alimta, Cymbalta, and Humalog, and the increase in collaboration and other revenue due to the inclusion of Erbitux revenue as a result of the ImClone acquisition. Revenue in the U.S. increased by $334.4 million, or 12 percent, and $659.7 million, or 13 percent, for the second quarter and first six months of 2009, respectively, compared with the same periods of 2008. Revenue outside the U.S. decreased $191.9 million, or 8 percent, and $277.8 million, or 6 percent, for the second quarter and first six months of 2009, respectively. For the second quarter, worldwide sales volume increased 6 percent, while selling prices contributed 3 percent of revenue growth, partially offset by the unfavorable impact of foreign exchange rates of 7 percent (numbers do not add due to rounding). For the first six months of 2009, worldwide sales volume increased 6 percent, while selling prices contributed 3 percent of revenue growth, partially offset by the unfavorable impact of foreign exchange rates of 6 percent (numbers do not add due to rounding).
Worldwide sales of Byetta increased 6 percent to $205.7 million and $387.2 million during the second quarter and first six months of 2009, driven by growth in international markets. U.S. sales of Byetta declined 1 percent during the second quarter and first six months of 2009, respectively to $175.1 million and $332.8 million. Sales outside the U.S. during the second quarter and first six months of 2009, respectively, were $30.6 million and $54.4 million.
We did not have any acquired IPR&D charges in either the second quarter or first six months of 2009, compared with $35.0 million and $122.0 million for the same periods in 2008, respectively. We incurred $105.0 million of asset impairments, restructuring, and other special charges in both the second quarter and first six months of 2009, compared with $88.9 million and $234.6 million for the same periods in 2008, respectively. See Notes 3 and 5 to the consolidated condensed financial statements for additional information.
As of June 30, 2009, cash, cash equivalents, and short-term investments totaled $3.49 billion compared with $5.93 billion at December 31, 2008. The decrease in cash is driven by a reduction in short-term borrowings of $4.81 billion and dividends paid of $1.08 billion, partially offset by proceeds of long-term debt issuances of $2.40 billion and cash from operations of $1.01 billion (which included payments related to the EDPA settlement of $1.39 billion).
Read the The complete ReportLLY is in the portfolios of PRIMECAP Management, Edward Owens of Vanguard Health Care Fund, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Brian Rogers of T Rowe Price Equity Income Fund, John Hussman of Hussman Economtrics Advisors, Inc., Charles Brandes of Brandes Investment, Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management, Dodge & Cox.
Eli Lilly and Company discovers develops manufactures and sells products in one significant business segment -pharmaceutical products. The company directs its research efforts primarily toward the search for products to diagnose prevent and treat human diseases. The company also conducts research to find products to treat diseases in animals and to increase the efficiency of animal food production. Eli Lilly and Company has a market cap of $40.27 billion; its shares were traded at around $35.05 with a P/E ratio of 7.9 and P/S ratio of 2. The dividend yield of Eli Lilly and Company stocks is 5.6%. Eli Lilly and Company had an annual average earning growth of 4.4% over the past 10 years. GuruFocus rated Eli Lilly and Company the business predictability rank of 4.5-star.
Highlight of Business Operations:
Worldwide revenues increased 3 percent and 4 percent to $5.29 billion and $10.34 billion for the second quarter and first six months of 2009, respectively, driven by the collective growth of Alimta, Cymbalta, Humalog, and the inclusion of Erbitux revenue as a result of the ImClone acquisition in November 2008. Net income for the second-quarter and the first six months of 2009 increased 21 percent and 22 percent, to $1.16 billion and $2.47 billion, respectively, compared with the same periods of 2008. Earnings per share for the second-quarter and the first six months of 2009 increased 20 percent and 22 percent to $1.06 per share and $2.25 per share, respectively, compared with the same periods of 2008. Net income for the second quarter and first six months of 2009 and 2008 was affected by the following significant items:In January 2009, we reached resolution with the Office of the U.S. Attorney for the Eastern District of Pennsylvania (EDPA), and the State Medicaid Fraud Control Units of 36 states and the District of Columbia, of an investigation related to our U.S. marketing and promotional practices with respect to Zyprexa. We recorded a charge of $1.42 billion for this matter in the third quarter of 2008. In 2009, we paid substantially all of this amount, as required by the settlement agreements. In addition, in October 2008, we reached a settlement with 32 states and the District of Columbia related to a multistate investigation brought under various state consumer protection laws, under which we paid $62.0 million. However, we have been served with lawsuits brought by Alaska, Arkansas, Connecticut, Idaho, Louisiana, Minnesota, Mississippi, Montana, New Mexico, Pennsylvania, South Carolina, Utah, and West Virginia, alleging that Zyprexa caused or contributed to diabetes or high blood-glucose levels, and that we improperly promoted the drug and seeking to recover the costs paid for Zyprexa through Medicaid and other drug-benefit programs, as well as the costs alleged to have been incurred and that will be incurred to treat Zyprexa-related illnesses. The Alaska case was settled in March 2008 for a payment of $15.0 million, plus terms designed to ensure, subject to certain limitations and conditions, that Alaska is treated as favorably as certain other states that may settle with us in the future over similar claims. We are in advanced discussions with the attorneys general for several states that were not part of the EDPA settlement, seeking to resolve their Zyprexa-related claims, and we have reached settlement with the state of West Virginia. In the second quarter of 2009, we incurred a pretax charge of $105.0 million, representing the currently probable and estimable exposures in connection with the states claims. Discussions are ongoing, and it is possible that additional charges may occur in the future. The cases in Connecticut and South Carolina have been set for trial in 2009; the trial in Pennsylvania is scheduled for 2010.
Revenue for the second-quarter and the first six months of 2009 increased 3 percent and 4 percent to $5.29 billion and $10.34 billion, respectively, and was driven primarily by the increase in net product sales related to the collective growth of Alimta, Cymbalta, and Humalog, and the increase in collaboration and other revenue due to the inclusion of Erbitux revenue as a result of the ImClone acquisition. Revenue in the U.S. increased by $334.4 million, or 12 percent, and $659.7 million, or 13 percent, for the second quarter and first six months of 2009, respectively, compared with the same periods of 2008. Revenue outside the U.S. decreased $191.9 million, or 8 percent, and $277.8 million, or 6 percent, for the second quarter and first six months of 2009, respectively. For the second quarter, worldwide sales volume increased 6 percent, while selling prices contributed 3 percent of revenue growth, partially offset by the unfavorable impact of foreign exchange rates of 7 percent (numbers do not add due to rounding). For the first six months of 2009, worldwide sales volume increased 6 percent, while selling prices contributed 3 percent of revenue growth, partially offset by the unfavorable impact of foreign exchange rates of 6 percent (numbers do not add due to rounding).
Worldwide sales of Byetta increased 6 percent to $205.7 million and $387.2 million during the second quarter and first six months of 2009, driven by growth in international markets. U.S. sales of Byetta declined 1 percent during the second quarter and first six months of 2009, respectively to $175.1 million and $332.8 million. Sales outside the U.S. during the second quarter and first six months of 2009, respectively, were $30.6 million and $54.4 million.
We did not have any acquired IPR&D charges in either the second quarter or first six months of 2009, compared with $35.0 million and $122.0 million for the same periods in 2008, respectively. We incurred $105.0 million of asset impairments, restructuring, and other special charges in both the second quarter and first six months of 2009, compared with $88.9 million and $234.6 million for the same periods in 2008, respectively. See Notes 3 and 5 to the consolidated condensed financial statements for additional information.
As of June 30, 2009, cash, cash equivalents, and short-term investments totaled $3.49 billion compared with $5.93 billion at December 31, 2008. The decrease in cash is driven by a reduction in short-term borrowings of $4.81 billion and dividends paid of $1.08 billion, partially offset by proceeds of long-term debt issuances of $2.40 billion and cash from operations of $1.01 billion (which included payments related to the EDPA settlement of $1.39 billion).
Read the The complete ReportLLY is in the portfolios of PRIMECAP Management, Edward Owens of Vanguard Health Care Fund, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Brian Rogers of T Rowe Price Equity Income Fund, John Hussman of Hussman Economtrics Advisors, Inc., Charles Brandes of Brandes Investment, Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management, Dodge & Cox.
