Eli Lilly Up After Besting 4Q Expectations

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It’s a good morning for Eli Lilly & Co. (LLY). *Shares of the pharmaceutical giant jumped just over 1% *or 44 cents a share to $39.67 a share in morning market action after the company posted bested fourth-quarter financial expectations, reaffirmed guidance for 2012 and disclosed plans to continue testing an experimental Alzheimer’s drug.

As with other pharmaceutical companies, the loss of patents protecting blockbuster drugs weighed on Lilly’s latest earnings results. *Sales of depression and diabetes medications helped offset a 44% plunge in sales of the schizophrenia medication Zyprexa, which lost its U.S. patent last year. Total revenue fell to just over $6 billion for the quarter from nearly $6.2 billion during the same period last year.

Still, at 87 cents a share, operating earnings bested the Capital IQ Consensus Estimate of 80 cents a share. And in 2012, the company expects to earn between $3.10 a share and $3.20 a share.

Lilly has taken steps to fill its pipeline through acquisitions, its own research and collaborations with other drug makers. Investors were relieved when Lilly disclosed today that two late-stage clinical trials of experimental Alzheimer’s disease drug solanezumab will continue, following interim safety and futility analyses by an independent monitoring committee.

Solanezumab would be a big contributor to a Lilly rebound if it shows a positive risk-benefit profile in testing and clears regulatory review. But investor expectations for the drug are relatively low due to uncertainty that the drug’s mechanism of action is the right approach to treating Alzheimer’s. The trials are expected to be completed in the second half of the year.



Original Article Source by Barrons.com