JK: Eli Lilly out with better-than-expected second quarter profits, also raising its guidance for the full year. Joining us now First on CNBC is John Lechleiter, Chairman and CEO of Eli Lilly. Mr. Lechleiter, it's great to see you. Thanks for joining us...(JL: Thanks.)...You beat by, I think, like 14 cents, right? [$]2.24, excluding items...I'm sorry, yeah, [$]1.24, excluding items, versus $1.10 estimate, but you're only raising the year view by 4 cents. That doesn't compute.
JL: Well, we're raising our guidance by a dime to $4.50 - $4.65 versus the guidance we gave at the end of the first quarter. We had a real strong revenue growth this quarter: 9%. More than half of that was volume-driven. Our operating expense controls enabled us to grow our earnings to $1.24. That's an 11% increase.
JK: Oh, I get it. I see what I'm saying, but the year guidance was already at...was already higher...so, I don't know if it's actually reflected. Are you being conservative about the next couple of quarters?
JL: We think we're being appropriate in the way we approach this. There are a lot of moving parts out there. We've seen price reform in Europe in just the last four to six weeks, which will have the effect of knocking down some of our prices in some European countries, and of course, we'll still feel the impact of healthcare reform. We expect that will take about...that that took about $70 million off of our top line in the second quarter, but all things adding up, we're confident enough in the year to raise our guidance.
JK: We do want an update on the impact of healthcare reform. Have you changed anything in the last three months, from the last time we spoke to you?
JL: We have. And we said in April that we thought the impact would be about $350-400 million on our top line for the year. We still think that's ballpark. The impact may be a little bit less, but we're still in that area.
JK: You're still in that area. Zyprexa has been a boost for earnings and that's usually one of the...it was Cymbalta...that's one of the things people always mention is helping you post these results...these better-than-expected results. What happens after Zyprexa goes off-patent next year?
JL: We'll lose our U.S. patent for Zyprexa in October of 2011. Obviously, our goal at that point, just as was our goal when we lost our Prozac patent ten years earlier, is to introduce new products. We launched Livalo, a new statin, with Kowa Pharmaceuticals, about a month ago. Some in-licensing deals we've just done have brought us two products currently under review by the FDA. And of course, we have eight molecules currently in Phase III, including two Alzheimer's medicines in late-stage development. We hope to be able to launch those beginning in about 2013.
CQ: John, what's been your thinking as you've watched from the sidelines the FDA panel and Avandia. I wonder if you think that is in any way a harbinger of what the...how the character of the FDA may be changing over the next couple of years?
JL: Well, I followed Avandia, as you have, from what I read and see in the press. I have to say I think the FDA is taking the appropriate approach and a very measured response. This is too important a matter to be adjudicated based on soundbites or based on headlines. I think the FDA recognizes there's always a benefit-risk balance. There are a lot of people right now who are benefiting from Avandia and it seems to me they're very carefully weighing that.
JK: We've got...I just wonder when they said they wanted you to be CEO, did they tell you that by 2013 half of your drugs from 2009 revenue were going off-patent, or is that in the fine print?
JL: Well, that's...we're not going to lose half our 2009 revenue by 2013. We do have a substantial number of products coming off-patent, frankly after going almost twenty years with only one major patent expiration, and that was Prozac. But we're confident. We have nearly 70 molecules today in some stage of clinical development. This is the most exciting pipeline we've ever had in our history. We're confident out of that pipeline are going to come new medicines that will replace that lost revenue.
JK: Yeah, no one knows...it would be disconcerting though, knowing that that's coming. You have to hope that your scientists are on the right track on some of these things.
JL: Well, we believe our scientists are on track. I think this industry, and Lilly in particular, is well-positioned to take advantage of this explosion in knowledge we've had in human medicine in the past twenty years. And of course, we recognize today, whether it's diabetes or Alzheimer's, the medical need in this country and in countries around the world continues to grow as populations age.
JK: I think of you almost as a mental health sort of company. Obviously, that's not all that Lilly does, but Cymbalta and Zyprexa, Prozac of course, which went off-patent, but you haven't been shy about making acquisitions in the past really, is that something that could help with the situation in the pipeline in 2010?
JL: Yeah, sure it can. We've made five acquisitions already this year. We're not interested in a large-scale combination with another large pharma company. We don't think that solves the challenge of innovating and coming up with new medicines. But we said we would equally be active in the kinds of deals that enable us to license in products that have either a near-term or medium-term prospects of launching during this patent expiration period.
JK: Carl mentioned Avandia quickly, and just the whole diabetes arena, Roche's loss was your gain obviously. We're going to get an update on Bydureon by what, October?
JL: We have an action date of October 22nd, so we would hope to hear from the FDA on or before that date.
JK: And that...I mean, you've got...that's a big market for you at this point.
JL: It is. It's an important category. Lilly and Amylin pioneered it with the introduction of Byetta in 2005. Bydureon is a once-a-week version, in essence, of Byetta. It would be the first weekly medicine ever available for people with Type 2 diabetes. We think that's pretty exciting.
JK: Alright. Mr. Lechleiter, we know you went to the wrong Saint Xavier, obviously, down in Louisville, but we appreciate your time...(CQ: He's done pretty well!)...He does...(CQ: He's more than made up for it!). I'm reading a teleprompter and you're running Eli Lilly...yeah, maybe...I take it back! Thanks for your time.
JL: Always a pleasure. Thank you.
JK: OK. See you later.
标题
Eli Lilly CEO on Earnings (CNBC)
视频介绍
First on CNBC Interview - July 22, 2010
Interview with John Lechleiter, Chairman and Chief Executive Officer, Eli Lilly Pharmaceuticals, on the company's Q2 '10 earnings results.
Speaker #1: Joe Kernen (JK), Reporter, CNBC
Speaker #2: John Lechleiter (JL), Chief Executive Officer, Eli Lilly
