Lilly Reports Robust Third-Quarter 2021 Financial Results as Pipeline Success Strengthens Future Growth Potential
INDIANAPOLIS, Oct. 26, 2021 /PRNewswire/ -- Eli Lilly and Company (NYSE: LLY) announced financial results for the third quarter of 2021 today.
"Lilly demonstrated strong performance again this quarter. Revenue attributable to our newer medicines grew more than 35 percent and represented nearly 60 percent of our core business, an important indicator of our long-term growth potential," said David A. Ricks, Lilly's chairman and CEO. "With numerous positive pipeline events this quarter, we have the potential to continue to expand the number of patients we serve through new indications for both Verzenio and Jardiance. We also progressed innovative, potential best-in-class treatment options in areas with high unmet need through a regulatory submission for tirzepatide in diabetes, the initiation of a rolling submission for donanemab in early Alzheimer's disease, the submission of Jardiance in HFpEF, and positive Phase 3 results for lebrikizumab in patients with atopic dermatitis."
$ in millions, except per share data | Third Quarter | % | ||||||
2021 | 2020 | Change | ||||||
Revenue | $ | 6,772.8 | $ | 5,740.6 | ||||
Net Income – Reported | 1,110.1 | 1,208.4 | (8)% | |||||
EPS – Reported | 1.22 | 1.33 | (8)% | |||||
Net Income – Non-GAAP | 1,763.7 | 1,289.2 | ||||||
EPS – Non-GAAP | 1.94 | 1.41 | ||||||
Certain financial information for 2021 and 2020 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include all revenue and expenses recognized during the periods. Non-GAAP measures reflect adjustments for the items described in the reconciliation tables later in the release. Beginning in 2021, non-GAAP measures exclude gains and losses on investments in equity securities and 2020 amounts have been reclassified for comparability. The company's 2021 financial guidance is being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company's business.
Key Events Over the Last Three Months
Regulatory
- The company submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) and a Marketing Authorization Application to the European Medicines Agency for tirzepatide for the treatment of adults with type 2 diabetes. A Priority Review Voucher was applied to the NDA, leading to an anticipated review time of eight months from the date of submission according to current FDA priority review timelines. Several additional submissions are planned around the world before the end of 2021.
- The company initiated rolling submission for donanemab to the FDA for accelerated approval in early Alzheimer's disease.
- In October 2021, the company and Pfizer discontinued the global clinical development program for tanezumab, an investigational nerve growth factor inhibitor. This decision was made following receipt of a Complete Response Letter from the FDA for the tanezumab application in osteoarthritis (OA) and a negative opinion adopted by the European Medicines Agency's Committee for Medicinal Products for Human Use on the tanezumab Marketing Authorization Application in OA.
- The company announced that the FDA approved Verzenio® as the first and only CDK4/6 inhibitor for certain people with HR+ HER2- high risk early breast cancer.
- The company announced that the FDA approved a new indication for Erbitux® in combination with Braftovi® for the treatment of certain adult patients with metastatic colorectal cancer with a BRAF V600E mutation.
- The FDA expanded the Emergency Use Authorization for bamlanivimab and etesevimab administered together to include post-exposure prophylaxis in certain individuals for the prevention of SARS-CoV-2 infection.
- The FDA granted Breakthrough Therapy designation for Jardiance® as an investigational treatment for adults with HFpEF, the company and Boehringer Ingelheim announced. The companies submitted Jardiance for regulatory approval in this indication to the FDA and in Europe.
- Jardiance was approved by the FDA to reduce the risk of cardiovascular death plus hospitalization for heart failure in adults with heart failure with reduced ejection fraction (HFrEF), the company and Boehringer Ingelheim announced.
- The FDA approved an expanded label for the company's rapid-acting insulin, Lyumjev®, indicated to improve glycemic control in adults with type 1 and type 2 diabetes, to include administration via continuous subcutaneous insulin infusion with an insulin pump.
Clinical
- The company announced plans to conduct TRAILBLAZER-ALZ 4, a Phase 3 head-to-head clinical trial comparing donanemab to aducanumab to assess superiority of brain amyloid plaque clearance in early symptomatic Alzheimer's disease. Enrollment is expected to begin this year.
- The company announced that in two Phase 3 trials lebrikizumab led to significant improvements at 16 weeks with at least 75 percent skin clearance in more than half of people with moderate-to-severe atopic dermatitis, and key secondary endpoints were achieved, including early onset in skin clearance and itch relief, improvement in interference of itch on sleep and quality of life.
Business Development/Other Developments
- The Office of the Assistant Secretary for Preparedness and Response, alongside the FDA, resumed the shipment and distribution of bamlanivimab and etesevimab administered together.
- The company announced an additional purchase by the U.S. government for its neutralizing antibody therapies authorized for emergency use as a treatment for COVID-19. As part of the agreement, the company will supply 388,000 doses of etesevimab to complement doses of bamlanivimab previously purchased by the U.S. government, with approximately 250,000 doses shipped in the third-quarter of 2021 and the remaining to be shipped in fourth-quarter 2021.
- The company announced a Joint Procurement Agreement with the European Commission to supply up to 220,000 doses of bamlanivimab and etesevimab for the treatment of COVID-19. This agreement helps to provide access to these COVID-19 antibodies by enabling participating countries in the European Union and European Economic Area to purchase the products directly from Lilly, following national approval for emergency use, or marketing authorization at the EU level.
- The company announced it will lower the list price of Insulin Lispro Injection in the U.S. by an additional 40 percent effective Jan. 1, 2022, bringing the list price down to 2008 levels.
- The company issued its first sustainability bond, for 600.0 million euros in aggregate principal amount. The bond proceeds will be allocated toward environmental projects including pollution prevention, energy efficiency and renewable energy; as well as social projects to increase access to essential services and socioeconomic advancement and empowerment.
- The company and Lycia Therapeutics, Inc. announced a multi-year research collaboration and licensing agreement focused on the discovery, development and commercialization of novel targeted therapeutics using Lycia's proprietary lysosomal targeting chimera protein degradation technology.
Third-Quarter Reported Results
In the third quarter of 2021, worldwide revenue was
Revenue in the U.S. increased 26 percent, to
Revenue outside the U.S. increased 8 percent, to
Gross margin increased 21 percent, to
Total operating expenses in the third quarter of 2021, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 8 percent to
In the third quarter of 2021, the company recognized acquired in-process research and development charges of
There were no asset impairment, restructuring and other special charges recognized in the third quarter of 2021. In the third quarter of 2020, the company recognized asset impairment, restructuring and other special charges of
Operating income in the third quarter of 2021 was
Other income (expense) was expense of
The effective tax rate was 10.9 percent in the third quarter of 2021, compared with 15.9 percent in the third quarter of 2020. The lower effective tax rate in the third quarter of 2021 compared to the same period in 2020 was primarily due to the income tax impact of the charge related to repurchase of higher-cost debt and the unfavorable mark-to-market adjustments on investments in equity securities, partially offset by a lower net discrete tax benefit compared to the same period in 2020.
In the third quarter of 2021, net income and EPS were
Third-Quarter Non-GAAP Measures
On a non-GAAP basis, third-quarter 2021 gross margin increased 18 percent, to
Operating income on a non-GAAP basis increased
Other income (expense) was expense of
The effective tax rate on a non-GAAP basis was 14.3 percent in the third quarter of 2021, compared with 15.0 percent in the third quarter of 2020. The lower effective tax rate in the third quarter of 2021 was driven by a mix of earnings in lower tax jurisdictions partially offset by a decrease in net discrete tax benefits compared to the same period in 2020.
On a non-GAAP basis, in the third quarter of 2021 net income increased 37 percent, to
For further detail on non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information" table later in this press release.
Third Quarter | ||||||||
2021 | 2020 | % Change | ||||||
Earnings per share (reported) | $ | 1.22 | $ | 1.33 | (8)% | |||
Charge related to repurchase of higher-cost debt | .35 | — | ||||||
Net losses (gains) on investments in equity securities | .19 | (.13) | ||||||
Acquired in-process research and development | .16 | — | ||||||
Amortization of intangible assets | .12 | .11 | ||||||
Asset impairment, restructuring and other special charges | — | .11 | ||||||
Partial reversal of COVID-19 antibodies inventory charge | (.11) | — | ||||||
Earnings per share (non-GAAP) | $ | 1.94 | $ | 1.41 | ||||
Numbers may not add due to rounding. | ||||||||
Year-to-Date Reported Results
For the first nine months of 2021, worldwide revenue increased 19 percent to
Year-to-Date Non-GAAP Measures
For the first nine months of 2021, operating income was
For further detail on non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information" table later in this press release.
Year-to-Date | ||||||||
2021 | 2020 | % Change | ||||||
Earnings per share (reported) | $ | 4.23 | $ | 4.47 | (5)% | |||
Acquired in-process research and development | .45 | .30 | ||||||
Charge related to repurchase of higher-cost debt | .35 | — | ||||||
Amortization of intangible assets | .34 | .25 | ||||||
COVID-19 antibodies inventory charges | .33 | — | ||||||
Asset impairment, restructuring and other special charges | .19 | .17 | ||||||
Net gains on investments in equity securities | (.22) | (.71) | ||||||
Earnings per share (non-GAAP) | $ | 5.67 | $ | 4.48 | ||||
Numbers may not add due to rounding. |
Selected Revenue Highlights
Selected Revenue Highlights | ||||||||||||||||||||
(Dollars in millions) | Third Quarter | Year-to-Date | ||||||||||||||||||
Selected Products | 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||||
Trulicity | $ | 1,600.1 | $ | 1,106.6 | $ | 4,588.2 | $ | 3,565.7 | ||||||||||||
Humalog®(a) | 626.7 | 656.9 | (5)% | 1,851.3 | 1,907.8 | (3)% | ||||||||||||||
Alimta | 457.0 | 578.0 | (21)% | 1,626.6 | 1,677.2 | (3)% | ||||||||||||||
Taltz | 593.1 | 454.5 | 1,565.4 | 1,293.2 | ||||||||||||||||
COVID-19 antibodies(b) | 217.1 | — | NM | 1,176.2 | — | NM | ||||||||||||||
Jardiance(c) | 390.4 | 310.8 | 1,058.9 | 840.3 | ||||||||||||||||
Verzenio | 335.5 | 234.4 | 945.8 | 631.1 | ||||||||||||||||
Humulin® | 286.7 | 305.9 | (6)% | 923.8 | 935.2 | (1)% | ||||||||||||||
Olumiant(d) | 406.9 | 162.0 | NM | 809.1 | 446.7 | |||||||||||||||
Cyramza | 253.4 | 252.7 | 762.5 | 748.4 | ||||||||||||||||
Basaglar® | 192.8 | 248.2 | (22)% | 650.1 | 842.3 | (23)% | ||||||||||||||
Forteo® | 200.9 | 266.9 | (25)% | 617.8 | 791.9 | (22)% | ||||||||||||||
Emgality | 140.0 | 91.5 | 415.7 | 252.9 | ||||||||||||||||
Tyvyt | 125.6 | 84.4 | 340.2 | 205.9 | ||||||||||||||||
Retevmo | 33.6 | 11.6 | NM | 76.1 | 17.9 | NM | ||||||||||||||
Total Revenue | 6,772.8 | 5,740.6 | 20,318.5 | 17,099.8 | ||||||||||||||||
(a) Humalog includes Insulin Lispro (b) COVID-19 antibodies include sales for bamlanivimab administered alone as well as sales for bamlanivimab and etesevimab administered (c) Jardiance includes Glyxambi®, Synjardy®, and Trijardy® XR (d) Olumiant includes sales of baricitinib that were made pursuant to EUA NM – not meaningful |
Trulicity
Third-quarter 2021 worldwide Trulicity revenue was
Humalog
For the third quarter of 2021, worldwide Humalog revenue decreased 5 percent compared with the third quarter of 2020, to
Alimta
For the third quarter of 2021, worldwide Alimta revenue decreased 21 percent compared with the third quarter of 2020, to
The company expects continued volume decline for Alimta as a result of the entry of generic competition due to the loss of patent exclusivity in Japan and major European markets. The company expects generic entrants in the U.S. beginning in the first quarter of 2022.
Taltz
For the third quarter of 2021, worldwide Taltz revenue increased 30 percent compared with the third quarter of 2020, to
Jardiance
The company's worldwide Jardiance revenue during the third quarter of 2021 was
Verzenio
For the third quarter of 2021, worldwide Verzenio revenue increased 43 percent compared with the third quarter of 2020, to
Humulin
For the third quarter of 2021, worldwide Humulin revenue decreased 6 percent compared with the third q