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Eli Lilly downsizes earnings estimate
January 06, 2004
Eli Lilly
and Co.'s stock price sank $1.05 a share Monday,
to $70.19, after the drugmaker predicted lower-than-expected
earnings this year.
In a news release and an earnings forecast
teleconference with investors and others, Lilly
said it expects to earn $2.80 to $2.85 a share
for 2004, compared with a consensus estimate
by Wall Street analysts of $2.93.
Earnings will be dragged down by heavy investments
in three newly approved drugs and three new
ones expected to hit the market this year, Lilly
said.
"To realize a very quick uptake on your
product is extremely important" and requires
upfront investments in marketing, research and
other areas, said Charles Golden, executive
vice president and chief financial officer.
Sales of the new products and five high-growth
older products should help bring double-digit
increases in Lilly's revenue this year over
last, the drugmaker said.
The company won't announce 2003 results until
the end of this month.
The lower profit forecast comes 21/2 years
after Lilly lost U.S. patent protection on its
former No. 1 product, the antidepressant Prozac,
causing its overall sales to plummet.
Lilly is "operationally turning the corner"
since the key Prozac patent was lost, but faces
a "lingering spending commitment"
that will hold down profits, said Ken Kulju,
a stock analyst for Credit Suisse First Boston,
in a report to investors.
Lilly still hasn't received final approval
from Food and Drug Administration inspectors
to start production at two Indianapolis plants
troubled by quality control problems for two
years
A recent "pre-approval inspection"
at a plant where an injectable form of the antipsychotic
Zyprexa will be made found no problems, but
the final FDA inspection hasn't been done, Lilly
said.
"Our manufacturing issues, which really
slowed us down in 2003, are really being overcome,"
Golden said.
Lilly said it plans to increase spending on
research and development this year.
Headed for market this year are Cymbalta for
depression, Alimta for a form of lung cancer
and injectable Zyprexa.
Last year Lilly launched Cialis for male sexual
dysfunction and Strattera for attention
deficit hyperactivity disorder and received
U.S. approval to sell Symbyax for manic depression.
source:-http://www.indystar.com
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