Pharma major Eli Lilly & Co has forecast higher 2008 earnings than analysts expected and said it plans to introduce six new medicines by 2011, when its biggest product, the antipsychotic Zyprexa, will face generic competition. It said earnings excluding one-time costs will reach $3.85 to $4.00 a share next year, as seven existing medicines generate sales of at least $1 billion each. Analysts had forecast $3.82.
While Zyprexa loses patent protection in 2011, the antidepressant Cymbalta and osteoporosis treatment Evista have patents that expire in 2014. The three generated $6.8 billion or 43 per cent of revenue last year. New products may help offset revenue losses from generic competition to these drugs. The company hasn't had a new drug cleared by the US FDA since 2005.
The compounds in development target schizophrenia, diabetes, and osteoporosis, among other ailments. The company will present details on its financial forecast and drug development efforts at a meeting on Friday 7 December in New York. Lilly has retained its earnings forecast for this year of $3.50 to $3.55 a share, excluding costs.
Chief executive officer Sidney Taurel has said the company plans to achieve growth through higher sales, reducing its workforce, and increasing productivity. Lilly has cut 5,000 positions since July 2004, about 11 per cent of its workforce, to generate around $500 million in savings this year. It expects to save $750 million next year.
Lilly also reaffirmed its 2007 financial guidance of $2.74 to $2.79 in net earnings a share. That includes costs of the Icos Corp acquisition it made earlier this year. The company has launched diabetes drugs in China, the second-largest market for diabetes in the world after India. It has more than doubled sales representatives in China since 2005.
In November, the company's experimental clot-blocking compound Prasugrel was found in a study to raise the risk of bleeding. This has increased the pressure on Lilly to advance other candidates in its pipeline. Prasugrel was more effective than market leader Plavix, but more patients developed serious bleeding on Lilly's medicine, which may limit its use.
The majority of the dangerous bleeding was in thin and older patients, and Lilly's studies indicated those patients may benefit from lower doses. Lilly plans to approach US regulators for marketing approval before the end of 2007. Another study will directly determine how effective the product is compared with Plavix, in patients whose doctors don't plan to reopen their blocked arteries. This represents about half the patients who have common heart conditions.
Other compounds Lilly is developing include Enzastaurin for non-Hodgkin's lymphoma, Arzoxifene for osteoporosis, and a once-a-week diabetes injection called Byetta. The company is also working on a longer-acting injectable version of Zyprexa, as well as inhaled insulin.
A new candidate, LY2140023, may replace Zyprexa. It works though different brain chemicals to control mental illness, and early studies show it doesn't lead to weight gain. Other early stage medicines Lilly is researching include treatments for diabetes, cardiovascular disease, cancer, Alzheimer's disease and rheumatoid arthritis.
LY2140023, if approved, could completely do away with atypicals, the group of antipsychotics to which Zyprexa and Johnson & Johnson's Risperdal belong. Zyprexa, which had $4.3 billion in 2006 sales, now faces competition from less expensive copies in Canada and Germany.