Lilly Announces 2016 Financial Guidance, Updates 2015 Expectations

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The FINANCIAL — Eli Lilly and Company on January 5 announced its 2016 financial guidance and highlighted key events for the upcoming year. The company also reaffirmed its commitment to grow revenue and expand margins through the balance of the decade, while sustaining a flow of innovative medicines and deploying capital to create shareholder value.

“We’ve stayed true to our commitment to innovation, and it’s paying off for patients and shareholders. Lilly continues to deliver on our financial commitments while advancing our pipeline and launching new medicines,” said John C. Lechleiter, Ph.D., Lilly’s chairman, president and chief executive officer.

Lechleiter added, “We enter 2016 in a position of strength anticipating continued growth. Our goal is to sustain the flow of valuable medicines from our pipeline to improve patients’ lives and create value for shareholders.”

“In 2016 we expect multiple regulatory actions across therapeutic areas including diabetes, oncology and immunology,” said Derica Rice, Lilly’s executive vice president for global services and chief financial officer. “This will be another important year for execution of our innovation-based strategy, which will solidify our near- to medium-term growth prospects.”

Lilly also said 2015 earnings per share are now expected to be in the range of $2.28 to $2.33 on a reported basis. Prior reported expectations were $2.40 to $2.45. This revision is due to fourth-quarter after-tax charges of approximately $0.12 per share associated primarily with the previously announced acquisition of worldwide rights to an intranasal glucagon from Locemia Solutions. Expected 2015 non-GAAP earnings per share, which will exclude these charges, have been reaffirmed at $3.40 to $3.45. For a further reconciliation of reported to non-GAAP earnings per share expectations for 2015, see the company’s Form 8-K dated October 22, 2015. Fourth-quarter and full-year 2015 financial results will be announced on January 28, 2016, according to Lilly.

2016 Financial Guidance

Earnings per share for 2016 are expected to be in the range of $2.92 to $3.02 on a reported basis and $3.45 to $3.55 on a non-GAAP basis. Non-GAAP figures for 2016 exclude amortization of intangibles as well as integration costs associated with the Novartis Animal Health acquisition.

The company anticipates 2016 revenue between $20.2 billion and $20.7 billion. Excluding the unfavorable impact of foreign exchange rates, the company expects revenue growth from a number of established products including Humalog, Trajenta, Cialis, Forteo, Strattera, Erbitux, and animal health products, as well as higher revenues from new products including Cyramza, Trulicity, Jardiance, Portrazza , and Basaglar.

Marketing, selling and administrative expenses are expected to be in the range of $6.0 billion to $6.2 billion. Research and development expenses are expected to be in the range of $4.8 billion to $5.0 billion.

The 2016 tax rate is expected to be approximately 20.5 percent on a reported basis and 22.5 percent on a non-GAAP basis. The expected 2016 reported tax rate includes the tax impact of integration costs associated with the Novartis Animal Health acquisition and amortization of intangibles.

 

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