5 takeaways from Eli Lilly's 3Q earnings
INDIANAPOLIS — The third quarter of 2014 brought lower revenue and even lower profits for Eli Lilly and Co.
Five takeaways:
1. Investors shouldn't panic. The drops in sales and earnings were expected. Revenue fell 16 percent to $4.88 billion from a year ago. Profits plunged 58 percent to $501 million. That was in line with what stock analysts predicted for the quarter. Recent expirations of patents on two major Lilly drugs, Cymbalta (an antidepressant) and Evista (for osteoporosis), stripped significant sales from Lilly's ledgers. Lilly is still in what it calls "Year YZ," the time when those patent expirations will hurt the most.
2. Lilly loves livestock. Animal health products remain a source of growth in these tough times. They've been unaffected by big patent expirations and posted sales gains of 10 percent from last year, to $585 million. Animal health sales will loom even larger in the year ahead after Lilly acquires Novartis Animal Health.
3. Two longtime insulin products continue to be a shot in the arm when it counts for Lilly. Humalog sales grew 15 percent to $706 million while Humulin sales rose 9 percent to $336 million over last year's third quarter.
4. Lilly's new No. 1 drug, Alimta, is pulling its weight. Sales of the cancer drug continue to grow steadily and increased 5 percent in the latest quarter, to $723 million.
5. Emerging markets showed the strongest growth in the quarter of any geographic area. Sales edged up 18 percent to $682 million. Among the fastest growing Lilly drugs in Third World countries: Forteo, which treats osteoporosis.