Eli Lilly Reports 7% Revenue Growth in 2018; FDA Approves New Indication for Alimta

On February 6, 2019, Eli Lilly and Company (NYSE: LLY) released its financial results for the fourth quarter and full year of 2018. VCBeat has summarized the key points as follows:

1. Revenue in the fourth quarter of 2018 increased by 5%, while operating expenses rose by 1%. For the full year 2018, revenue grew 7% to $24.556 billion, with a net income of $3.232 billion.

2. Pharmaceutical revenue increased by 5% in the fourth quarter of 2018, driven by an 11% growth in sales volume. Recently launched drugs, including Trulicity, Taltz, Basaglar, Olumiant, Jardiance, Verzenio, and Lartruvo, accounted for approximately 38% of pharmaceutical revenue and demonstrated strong sales growth.

3. Total operating expenses in 2018 decreased by 1% compared to 2017, amounting to $11.939 billion. Research and development expenses decreased by 1%, totaling $5.307 billion.

4. Imminent completion of the acquisition of Loxo Oncology, comprehensively expanding Eli Lilly and Company’s oncology product pipeline.

5. Eli Lilly and Company plans to launch an exchange offer to its shareholders in the first half of 2019 to divest their remaining ownership interests in Elanco Animal Health.

FDA Approves Alimta in Combination with Keytruda and Platinum-Based Chemotherapy for First-Line Treatment of Metastatic Non-Squamous Non-Small Cell Lung Cancer Without EGFR or ALK Genomic Tumor Aberrations

European Commission Approves Emgality for the Prevention of Migraine in Adults With at Least 4 Migraine Days per Month

The company disclosed the results of the Phase III clinical study of Lartruvo (olaratumab). The results showed that the clinical efficacy of Lartruvo in combination with doxorubicin for the treatment of patients with advanced or metastatic soft tissue sarcoma was not confirmed compared to doxorubicin monotherapy as the standard of care. The company has suspended the promotion of Lartruvo and is working with global regulatory authorities to determine next steps.

The company and Incyte announced that baricitinib met the primary endpoints in two Phase III studies evaluating the efficacy and safety of baricitinib monotherapy in adults with moderate-to-severe atopic dermatitis.

The company announced that the Phase IIIb/IV clinical study of Taltz (Ixekizumab) met its primary and all key secondary endpoints. The study was designed to evaluate the safety and efficacy of Taltz versus adalimumab in the treatment of active psoriatic arthritis.

The company and Pfizer announced that the results of a Phase III study evaluating the efficacy of Tanezumab 2.5 mg or 5 mg in patients with moderate to severe osteoarthritis showed positive efficacy for Tanezumab. Tanezumab is a humanized monoclonal antibody and part of the research on nerve growth factor inhibitors, a class of non-opioid analgesics.

Eli Lilly plans to launch an exchange offer to its shareholders in the first half of 2019, exchanging its shares for Elanco shares to divest the remaining ownership interests of company shareholders in Elanco Animal Health. The exact timing of this share exchange plan will depend on market conditions, but it could begin as early as the next few days.

The company announced a definitive agreement to acquire Loxo Oncology for $235 per share in cash, valued at approximately $8 billion. Loxo Oncology is a biopharmaceutical company focused on the development and commercialization of highly selective cancer therapies defined by genomics.

The company announced that it had entered into an exclusive license agreement with Aduro Biotech for the collaborative development of Aduro’s cGAS-STING pathway inhibitor program, thereby advancing the development of novel immunotherapies targeting autoimmune and other inflammatory diseases.

The company announced an agreement with Hydra Biosciences to acquire all assets of Hydra’s preclinical TRPA1 antagonist program. This program targets the transient receptor potential (TRP) family of ion channels, which are currently being investigated for the development of potential therapies for chronic pain syndromes.

The company announced a collaborative licensing agreement with AC Immune SA to develop small-molecule inhibitors that suppress Tau protein aggregation, for the potential treatment of neurodegenerative diseases such as Alzheimer’s disease (AD).

The financial report also disclosed the sales performance of the company’s marketed drugs:

The report indicates that the company expects its 2019 revenue to range between $25.1 billion and $25.6 billion. Revenue growth will continue to be driven by new drugs, including Trulicity (up 58% in 2018), Taltz (up 68% in 2018), Basaglar (up 85% in 2018), Jardiance (up 47% in 2018), and Cyramza (up 8% in 2018). Additionally, revenue growth is expected to come from recently launched products such as Emgality for migraine treatment and the broad-spectrum anticancer drug larotrectinib (Vitrakvi), as well as other drugs anticipated to gain approval in 2019. This revenue growth will be partially offset by negative growth from products that have lost patent protection, namely Cialis, Effient, and Strattera, and will also be impacted by price reductions for products such as Trulicity, Basaglar, Forteo, and Taltz.

Gross margin as a percentage of revenue is expected to remain at approximately 75.0% on a reported basis and 76.5% on a non-GAAP basis.

Marketing, sales, and administrative expenses are projected to range from $6.4 billion to $6.7 billion. Research and development expenses are currently estimated at $5.8 billion to $6.0 billion.

Other expenses are projected to be $175 million and $325 million, reflecting the additional interest expenses associated with the pending acquisition of Loxo Oncology.