Eli Lilly (LLY) is scheduled to report the results of its fourth fiscal quarter before the market open on Wednesday, February 6, with a conference call scheduled for 9:00 am EDT. What to watch for: 1. GUIDANCE: Along with its third quarter financial report in late October, the drug giant raised its FY18 EPS view to $5.55-$5.60 from $5.40-$5.50. This past December, the drug company backed its FY18 EPS view and revenue views and gave its perspective on 2019. Lilly said it sees EPS for 2019 to be in the range of $5.90 to $6.00 on a non-GAAP basis. Lilly sees FY19 revenue $25.3B-$25.8B against a consensus of $24.77B, representing mid-single-digit growth driven by volume from newer medicines, including Trulicity, Taltz, Basaglar, Jardiance, Verzenio, Cyramza, Olumiant and Lartruvo, as well as the recent launch of Emgality. Having launched ten new medicines over the past five years, the company expects continued pipeline progress in 2019, including U.S. regulatory action for nasal glucagon for hypoglycemia and lasmiditan for acute migraine, as well as new indications for several medicines. The company has revised its 2020 minimum financial expectations and now expects at least 6% compound annual revenue growth from 2015 to 2020 for the full company, and at least 7% compound annual revenue growth for its human pharmaceutical business. 2. GENERIC COMPETITION: Eli Lilly’s second-highest grossing drug in 2017, erectile dysfunction treatment Cialis, is seeing generic competition. This past September Teva’s (TEVA) EVP and Head of Global R&D, Hafrun Fridriksdottir said, “We’re proud to offer an affordable treatment option for the estimated 30M men affected by ED, many of whom will also have symptomatic BPH which is estimated to affect 15M men in the United States.” 3. MIGRAINE PREVENTION DRUG. In late September, Eli Lilly announced that the FDA has approved Emgality for the preventive treatment of migraine in adults. Emgality will be available for pickup at retail pharmacies. Migraine is a disabling, neurologic disease that affects more than 30M American adults. According to the Medical Expenditures Panel Survey, the total unadjusted cost associated with migraine in the U.S. is estimated to be as high as $56B annually, yet migraine remains under-recognized and under-treated. 4. LOXO ONCOLOGY ACQUISITION: On January 7, Eli Lilly and Loxo Oncology (LOXO) announced a definitive agreement for Lilly to acquire Loxo Oncology for $235 per share in cash, or approximately $8B. Loxo Oncology is a biopharmaceutical company focused on the development and commercialization of highly selective medicines for patients with genomically defined cancers.
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