Date: January 4, 2013
For Release: Immediately
Refer to: (317) 276-5795 - Mark E.
Taylor (Media)
(317) 655-6874 - Philip Johnson
(Investors)
Lilly Comments on 2012 Financial Guidance and Announces 2013
Financial Guidance
* Company reconfirms 2012 financial expectations, excluding the impact from
the delayed enactment of the American Taxpayer Relief Act of 2012.
* 2013 revenue anticipated to be between $22.6 billion and $23.4 billion.
* Excluding the one-time impact from the delayed enactment of the American
Taxpayer Relief Act of 2012, earnings per share for 2013 are forecasted to
be in the range of $4.03 - $4.18 (reported), or $3.75 - $3.90 (non-GAAP).
* Mid-term guidance through 2014 reconfirmed with minimum annual results of
at least $20 billion in revenue, $3 billion in net income and $4 billion in
operating cash flow.
* Company reaffirms commitment to fund dividend at least at current level and
complete $1.5 billion share repurchase program in 2013.
* Late-stage pipeline includes 13 potential new medicines in Phase III
development.
INDIANAPOLIS, IN - Eli Lilly
and Company (NYSE: LLY) today commented on its 2012 financial
guidance, announced its financial guidance for 2013 and reconfirmed
its mid-term guidance through 2014.
Because the enactment of the American Taxpayer Relief Act of
2012 was not completed until 2013, certain provisions of the Act
benefitting the company's 2012 federal taxes, including the
extension of the R&D tax credit for 2012, cannot be recognized
in the company's 2012 financial results and instead will be
reflected in the company's 2013 financial results. The company
plans to provide an update on the estimated financial implications
of the Act as part of its fourth quarter and full-year 2012
financial results announcement on January
29, 2013.
The company previously published 2012 earnings per share
guidance in the range of $3.68 to
$3.78 on a reported basis, or $3.30
to $3.40 on a non-GAAP basis when excluding $.43 per share of income from the early payment
of Amylin's exenatide revenue sharing obligation and $.05 per share of asset impairment and
restructuring charges through the first nine months of 2012. As
previously communicated, this guidance assumed that the 2012 tax
benefits described above would be recorded in 2012. The company's
financial expectations for 2012 are unchanged, except that both
reported and non-GAAP earnings for the fourth quarter and full year
of 2012 will not reflect the 2012 tax benefits described above.
The company's 2013 financial guidance excludes the one-time
impact associated with 2012 that will be recorded in 2013 resulting
from the delay in the enactment of the Act. For 2013, the company
expects earnings per share to be in the range of $4.03 to $4.18 on a reported basis, or
$3.75 to $3.90 on a non-GAAP basis
when excluding an estimated $.28 per
share of exenatide-related income contingent upon the transfer of
exenatide commercial rights outside the U.S. to Amylin.
Derica Rice, Lilly executive vice
president, global services and chief financial officer, commented
on the company's mid-term financial guidance through 2014. "We
remain on track to meet or exceed our minimum financial performance
targets. From now through 2014, on an annual basis we still expect
revenue to be at least $20 billion,
net income to be at least $3 billion,
and operating cash flow to be at least $4
billion."
"At Lilly, we continue to implement the three primary elements
of our strategy to bridge our current period of patent expirations
and return to sustainable growth. We have made substantial progress
in recent years and expect 2013 to continue that trend," said
John C. Lechleiter, Ph.D., Lilly's
chairman, president and chief executive officer. "We are
replenishing and advancing our pipeline, which now has 13 potential
new medicines in Phase III testing. We are investing to drive
growth in key currently marketed brands and in our counter-cyclical
growth areas; and we continue to make productivity gains across our
business to fund the R&D necessary to fuel our future growth,
recapitalize our physical assets, maintain our dividend and support
our share repurchase program. We believe our strategy is the right
one for Lilly and one that will continue to create value for all of
our stakeholders."
2013Financial Guidance
The company's 2013 financial guidance excludes the one-time
impact associated with 2012 that will be recorded in 2013 resulting
from the delay in the enactment of the Act. The company expects
full-year 2013 earnings per share to be in the range of
$4.03 to $4.18 on a reported basis,
or $3.75 to $3.90 on a non-GAAP basis
when excluding an estimated $.28 per
share of exenatide-related income contingent upon the transfer of
exenatide commercial rights outside the U.S. to Amylin.
The company anticipates 2013 revenue of between $22.6 billion and $23.4 billion. Despite the
initial impact of the U.S. Cymbalta patent expiration in the fourth
quarter of 2013 and the loss of the on-going 15 percent royalty on
worldwide exenatide sales, the company expects overall revenue
growth, driven by a portfolio of products including Humalog®,
Humulin®, Cialis®, Strattera®, Forteo®, Alimta®, Cymbalta® outside
the U.S., Effient®, Tradjenta® and Axiron®, as well as animal
health products. In addition, significant revenue growth is
expected in Japan and the emerging
markets, particularly China.
The company anticipates that gross margin as a percent of
revenue will be approximately 78 percent.
Total operating expenses in 2013 are expected to be flat to
slightly decreasing compared to 2012, reflecting continued expense
controls and productivity gains. Marketing, selling and
administrative expenses are expected in the range of $7.1 billion to $7.4 billion. Research and
development expenses are expected to be in the range of
$5.2 billion to $5.5 billion.
On a reported basis, other income and deductions is expected to
be in a range between $340 million and $490
million of net income in 2013. On a non-GAAP basis, other
income and deductions is expected to be in a range between
$0 and $150 million of net expense,
which excludes an estimated $490
million of deferred exenatide-related income contingent upon
the transfer of exenatide commercial rights outside the U.S. to
Amylin.
On a reported basis, the 2013 tax rate is expected to be
approximately 22.5 percent, assuming a full-year 2013 benefit of
the R&D tax credit. On a non-GAAP basis, the 2013 tax rate is
expected to be approximately 21 percent. Both tax rates for 2013
exclude the one-time impact associated with 2012 that will be
recorded in 2013 resulting from the delay in the enactment of the
American Taxpayer Relief Act of 2012.
Operating cash flows are expected to be more than sufficient to
allow for capital expenditures of approximately $900 million, fund potential business development
activity, pay the company's dividend, and complete the company's
previously announced $1.5 billion
share repurchase program.
Webcast of Conference Call
As previously announced, investors, media and the general public
can access a live webcast of the 2013 financial guidance conference
call through a link on Lilly's website at www.investor.lilly.com.
The conference call will be held today beginning at 9:00 a.m. Eastern Standard Time (EST) and will be
available for replay via the website.
Lilly, a leading innovation-driven corporation, is developing a
growing portfolio of pharmaceutical products by applying the latest
research from its own worldwide laboratories and from
collaborations with eminent scientific organizations. Headquartered
in Indianapolis, Ind., Lilly
provides answers - through medicines and information - for some of
the world's most urgent medical needs. Additional information about
Lilly is available at www.lilly.com.
This press release contains management's current intentions and
expectations for the future, all of which are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. The
words "estimate", "project", "intend", "expect", "believe",
"target" and similar expressions are intended to identify
forward-looking statements. Actual results may differ materially
due to various factors. There are significant risks and
uncertainties in pharmaceutical research and development. There can
be no guarantees with respect to pipeline products that the
products will receive the necessary clinical and manufacturing
regulatory approvals or that they will prove to be commercially
successful. Pharmaceutical products can develop unexpected safety
or efficacy concerns. The company's results may also be affected by
such factors as competitive developments affecting current
products; market uptake of recently launched products; the timing
of anticipated regulatory approvals and launches of new products;
regulatory actions regarding currently marketed products; issues
with product supply; regulatory changes or other developments;
regulatory compliance problems or government investigations; patent
disputes; changes in patent law or regulations related to
data-package exclusivity; other litigation involving current or
future products; the impact of governmental actions regarding
pricing, importation, and reimbursement for pharmaceuticals,
including U.S. health care reform and deficit-reduction measures;
changes in tax laws, including the American Taxpayer Relief Act of
2012; asset impairments and restructuring charges; acquisitions and
business development transactions; and the impact of exchange rates
and global macroeconomic conditions. For additional information
about the factors that could cause actual results to differ
materially from forward-looking statements, please see the
company's latest Form 10-Q and Form 10-K filed with the U.S.
Securities and Exchange Commission. You should not place undue
reliance on forward-looking statements, which speak only as of the
date of this release. Except as is required by law, the company
expressly disclaims any obligation to publicly release any
revisions to forward-looking statements to reflect events after the
date of this release.
# # #
Alimta® (pemetrexed, Lilly)
Axiron® (testosterone, Acrux Corp.)
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Forteo® (teriparatide [rDNA origin] injection, Lilly)
Humalog® (insulin lispro injection of recombinant DNA origin,
Lilly)
Humulin® (human insulin of recombinant DNA origin, Lilly)
Strattera® (atomoxetine hydrochloride, Lilly)
Tradjenta® (linagliptin, Boehringer Ingelheim)
Eli Lilly and Company
Lilly Corporate Center
Indianapolis, Indiana 46285
U.S.A.
www.lilly.com