Global revenue increased 5% in 2011 at Eli Lilly to $24.2 billion after the company saw demand increase but net income fall 14% to $4.3bn.
Agreements to supply generic versions of Zyprexa and Gemzar helped reduce the impact after the two lost patent exclusivity and saw revenue in the US increase by one per cent to $12.9bn. Revenue outside the US increased 11% to $11bn.
Lilly says total revenue was reduced by approximately $410 million due to the impact of the US healthcare reforms and now predicts to lose billions of dollars in 2012 due to generic competition for Zyprexa.
In 2011, total operating expenses increased 8% and R&D expenses were up 3% to just over $5bn. Lilly also paid $316.4m in relation to severance costs after its restructuring.
Its operating income was down 15% to $5.5bn compared to 2010 after an increase in R&D charges as part of its diabetes collaboration with Boehringer Ingelheim, coupled with clinical trial costs, restructuring and lower gross margin per cent.
The loss of patent exclusivity on antipsychotic treatment Zyprexa saw global sales drop 8% to $4.6bn. Zyprexa lost its patent protection in the US in October, resulting in sales decreasing by 13%. Outside the US, where exclusivity was also lost in the majority of markets, sales fell 3% to $2.45bn. But in Japan, where its patent still stands, sales reached $540m.
Gemzar also suffered at the hands of generic competition for the first time as sales decreased by 61% to $452.1m. But the news was better for Alimta, Humalog, Cialis, Humulin, Evista, Forteo and Strattera, which all recorded improved sales in 2011.
Lilly also received royalties of $409.2 million from Erbitux, an increase of 6% on 2010; $422.7m from Byetta, a 2% loss compared with 2010; and $302.5m from sales of Effient.
But Lilly now anticipates that revenue will fall to between $21.8bn and $22.8bn next year after an expected decline of more than $3bn in Zyprexa sales due to its exposure to generic competition. It hopes the loss in revenue will be partially offset by growth in Cymbalta, Cialis, Humalog, Humulin and Forteo, as well as continued improvement in its newer products such as Effient, Axiron and Tradjenta.
Japan and Emerging Markets are expected to continue to post strong underlying growth. But overall revenue in these markets is also expected to be hit by pricing actions in Japan and the impact of patent expirations, including Zyprexa, in a number of countries in these regions.