Lilly lowers 2001 earnings forecast

Pharmaceutical giant Eli Lilly has lowered its earnings estimates for the next two years as a direct result of the erosion of Prozac sales in the US. The firm said that the erosion seen in prescriptions is the 'worst ever' for a blockbuster product, and has reduced its earnings per share expectation to between $0.59 and $0.61 for the fourth quarter of 2001, significantly lower than analysts' expectations of $0.66.

The company expects full year 2001 earnings per share of $2.75 to $2.77. This compares with 2000 earnings per share of $2.65.

Charles E. Golden, executive vice president and chief financial officer, reaffirmed the company's expectations of single-digit sales growth for 2001 and 2002. However, the company said that its strategy to maximise its pipeline has paid off in the form of five potential new products that could offset this earnings forecast reduction. These are Xigris for the treatment of sepsis, the osteoporosis therapy Forteo, Cialis for the treatment of erectile dysfunction, as well as ato-moxetine and duloxetine for depression.

For 2003, the company is predicting earnings growth in the high teens. According to president and ceo Sidney Laurel, '2003 will be the first full year period after the Prozac patent expiration that will greatly benefit from the five planned new product launches'.

Meanwhile, the firm says it has received an 'approvable' letter from the US Food and Drug Administration for its new osteoporosis therapy, Forteo, in postmenopausal women and men with osteoporosis. In July, an FDA advisory committee backed the drug, but was unsure whether to recommend the drug for use in men with the disease. Approval is now dependent on labelling negotiations and manufacturing inspection.

Last month, a US FDA advisory committee was split over whether to recommend approval of Lilly's novel biotech product, Xigris, for the treatment of severe sepsis.