Profit at Eli Lilly & Co. soared in the third quarter as strong U.S. sales of new prescription drugs helped counter slower growth overseas.
Revenue at the Indianapolis-based drug maker rose 7 percent to $6 billion, buoyed by an 11 percent increase in U.S. sales, the company said on Tuesday. Net income grew to $1.4 billion, or $1.12 per share, higher than analyst’s expectations.
The bulk of Eli Lilly’s earnings came from newer prescription drugs. Worldwide sales of diabetes treatment Trulicity climbed 55 percent to $816 million, while sales of psoriasis medicine Taltz increased 74 percent to $264 million. Revenue growth was curbed, however, by lower sales of legacy products such as Cialis, which recently lost exclusivity rights and is now facing generic competitors, and the drugmaker lowered the high end of its full-year profit target by 6 percent to $3.09 a share.
Eli Lilly is focused on “discovering and developing breakthrough medicines,” CEO David Ricks said in a statement. The company’s stock dropped slightly to $109.55 per share in pre-market trading in New York.
After the 2018 midterm elections, sources say the drug industry will continue to push Congress to roll back a measure passed earlier this year that increased the portion of a treatment’s price that companies must cover in the Medicare Part D program in order to close a gap in coverage known as the ‘donut hole.’
Experts say the change, which could cost the industry billions, will largely impact firms such as Eli Lilly that manufacture the most popular self-administered drugs. Chief Financial Officer Joshua Smiley warned investors that revenues could decrease $200 million in 2019 as a result of the shift.
The pharmaceutical industry will be under intense pressure in Washington, D.C., regardless of whether Democrats retake the House, the Senate, or both. The Trump administration is pushing a proposal to tie reimbursement rates for drugs offered in Medicare Part B to international prices. Pfizer’s top executive previously said the plan “imports price controls from abroad into the U.S.”
CORRECTION: The estimated impact of the so-called donut hole on Eli Lilly, in the penultimate paragraph, has been corrected.
