Industry Trend Analysis - New Product Portfolio To Underpin Eli Lilly's Growth Outlook - SEPT 2017


BMI View: Eli Lilly's Q217 financial results highlight that the firm will continue to derive its growth from a broad portfolio of innovative products. Eli Lilly's range of new pharmaceutical products, spanning several therapeutic areas, ranging from psoriasis to diabetes will maintain the firm's upwards revenue trajectory. Increased uptake of these new products, combined with further international launches will ensure sustained growth, improving the long-term outlook for investors.

Eli Lilly registered an increase in revenues of 7.8% y-o-y (year-on-year) to USD5.8bn in its Q217 financial results, driven primarily by volume growth from Trulicity (dulaglutide), Taltz (ixekizumab) and other new pharmaceutical products, including Basaglar (insulin glargine injection), Jardiance (empagliflozin), Lartruvo (olaratumab) and Cyramza (ramucirumab). The increase in marketing, selling, and administrative expenses was driven by higher spending to support new products and partially offset by lower spending on later life cycle products.

In Q217, net income rose by 35% y-o-y to USD1.0bn, and earnings per share increased by 34% y-o-y to USD0.95, beating analyst expectations; these were driven primarily by higher operating income. Eli Lilly's full-year guidance for 2017 has been revised since the Q117 earnings call in April 2017. Previous earnings per share for 2017 were set at USD2.6-2.7 due to severance costs incurred as a result of actions taken to reduce the company's cost structure. This has been decreased to be in the range of USD2.51-2.61 on a reported basis. The firm's full-year revenue guidance has been upgraded from USD21.8-22.3bn to USD22.0-22.5bn, highlighting the anticipated acceleration of sales growth in H217 from the firm's mixture of established and new products.

Steady Increase In Net Sales
Eli Lilly Financial Snapshot (USDmn)
Source: Eli Lilly, BMI

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