(Updates with closing share price in sixth paragraph.)
April 24 (Bloomberg) -- Eli Lilly & Co., the drugmaker in its worst year of declining sales, reported profit that matched analysts’ estimates as gains from its animal health unit helped offset declining pharmaceutical revenue.
Lilly reported first-quarter profit of 70 cents a share, matching the average of analysts’ estimates compiled by Bloomberg. Sales were $4.68 billion, Indianapolis-based Lilly said in a statement, below the $4.8 billion analysts predicted.
It was “overall not a great quarter, but we doubt most shareholders will care,” Mark Schoenebaum, an analyst with ISI Group LLC, said in an e-mail to clients. “This is Lilly’s trough earnings year, and investor focus is squarely on the pipeline.”
Lilly has said 2014 will be its worst in a wave of sales losses as patents expire on its top drugs. In December, it lost exclusive marketing rights for Cymbalta, an antidepressent which sold $5.08 billion last year and is projected to sell $1.42 billion this year. In March, its osteoperosis drug Evista lost patent protection.
Growth outside the U.S. and in a non-drug unit helped counter the drop in revenue, the company said. While U.S. sales fell 34 percent, the company’s sales in the rest of the world, where the drugmaker now does more than half its business, grew 5 percent.
Lilly shares fell 1.5 percent to $58.68 at the close in New York. The drugmaker has gained 4.7 percent in the past 12 months.
Revenue from Lilly’s animal health business increased 6 percent to $527 million. Lilly is expanding in veterinary medicine, and on April 22 agreed to buy Novartis AG’s animal unit for $5.4 billion. The purchase will make Lilly’s animal health business the world’s second biggest.
“You’re seeing companies build on their strengths, add to existing areas of strength and get rid of assets where they might be sub-scale,” Chief Executive Officer John Lechleiter said on a conference call today discussing the results. “Animal health is one of the few opportunities we have to diversify in a meaningful way that still has synergies to our pharma business.”
Cymbalta sales beat analysts’ projections, generating sales of $478 million, down 64 percent. Lilly increased its full-year sales forecast to $19.4 billion to $20 billion, a $200 million rise from what it said in January.
To replace revenue from patent expirations, Lilly is counting on experimental treatments in diabetes and cancer. Among its most promising is a breast cancer medicine called bemaciclib, which the company is moving into final stage trials. It also plans to have a drug in every category of care for diabetes, with the goal of being able to appeal more broadly to doctors and insurers.
Net income fell 53 percent to $728 million, or 68 cents a share, from $1.55 billion, or $1.42, a year earlier, the company said.