Lilly Announces 2004 Financial Guidance 
 
    INDIANAPOLIS, Jan. 5  -- Eli Lilly and Company 
(NYSE: LLY) today announced its financial expectations for the first-quarter 
and full-year 2004.  
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20031219/LLYLOGO ) 
    Specifically, the company expects earnings per share to be in the range of 
$.65 to $.67 for the first quarter of 2004 and $2.80 to $2.85 for the full-
year 2004.  The company's earnings guidance for the first quarter and full 
year excludes significant unusual items.  As previously disclosed, the company 
will report a substantial one-time charge for acquired in-process research and 
development related to the Applied Molecular Evolution merger, which is 
anticipated to close in the first quarter of 2004.  At this time, the amount 
of the charge cannot be determined.  The company is not aware at this time of 
any other material unusual items that will occur in 2004.   
    For the full-year 2004, the company expects low double-digit sales growth, 
gross margins as a percent of sales to be essentially flat compared with the 
prior year, marketing and administrative expenses to grow in the low double 
digits, and research and development expenses to grow in the mid-teens. 
Further, the company expects that other income/deductions (net other income 
less interest expense) will be approximately $100 to $120 million for 2004 and 
that the tax rate should remain essentially constant.   
    "In 2004, Lilly anticipates having 11 major growth products, including six 
new products that either were launched last year or are expected to be 
launched this year," said Charles E. Golden, executive vice president and 
chief financial officer for Lilly.  "We are committed to making the 
investments necessary to maximize our products in the marketplace and optimize 
the new-product launches to realize their significant market potential.  We 
are also continuing to invest in R&D at the top of the industry as a percent 
of sales in order to develop our industry-leading pipeline, including our next 
wave of innovative products.  These investments will position Lilly to deliver 
superior long-term growth."  
 
    Webcast of Conference Call 
    As previously announced, investors and the general public can access a 
live webcast of the 2004 financial guidance conference call through a link on 
Lilly's website at www.lilly.com .  The conference call will be held today 
from 8:30 a.m. to 9:15 a.m. EST and will be available for replay via the 
website through January 19, 2004. 
    Lilly, a leading innovation-driven corporation, is developing a growing 
portfolio of first-in-class and best-in-class 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 forward-looking statements that are based on 
management's current expectations, but 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.  The company's results may also be affected by such 
factors as competitive developments affecting current growth products, rate of 
sales growth of recently launched products, the timing of anticipated 
regulatory approvals and launches of new products, other regulatory 
developments, patent disputes and other litigation involving current and 
future products, the impact of governmental actions regarding coverage and 
reimbursement for pharmaceuticals, and the impact of exchange rates.  For 
additional information about the factors that affect the company's business, 
please see Exhibit 99 to the company's latest Form 10-Q filed November 2003.  
The company undertakes no duty to update forward-looking statements. 
 
SOURCE  Eli Lilly and Company 
    -0-                             01/05/2004 
    /CONTACT:  Terra L. Fox of Eli Lilly and Company, +1-317-276-5795/ 
    /Photo:  NewsCom: http://www.newscom.com/cgi-bin/prnh/20031219/LLYLOGO 
              PRN Photo Desk, photodesk@prnewswire.com/ 
    /Web site:  http://www.lilly.com / 
    (LLY) 
 




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