January 30, 2020 / 3:13 PM / a month ago

Eli Lilly beats profit estimates on strong demand for diabetes drug Trulicity

(Reuters) - Eli Lilly and Co reported a higher-than-expected quarterly profit on Thursday, helped by strong demand for its newer treatments such as diabetes drug Trulicity and psoriasis therapy Taltz, sending its shares up more than 2%.

The logo of Lilly is seen on a wall of the Lilly France company unit, part of the Eli Lilly and Co drugmaker group, in Fegersheim near Strasbourg, France, February 1, 2018. Picture taken February 1, 2018. REUTERS/Vincent Kessler/Files

The drugmaker has been expanding its treatment portfolio and boosting sales of its newer drugs as older medicines including erectile dysfunction treatment Cialis lose market share to cheaper copycats.

The results also alleviate investors’ “exaggerated concerns” over the launch of Novo Nordisk’s once-daily oral diabetes pill, Rybelsus, Citi analyst Andrew Baum said.

Rybelsus, approved late last year, is expected to be embraced by patients with an aversion to needles used to deliver treatments such as Trulicity.

Sales of Trulicity rose nearly 31% to $1.21 billion in the fourth quarter, accounting for about a fifth of total sales and surpassing expectations of $1.15 billion, according to four analysts polled by Refinitiv.

The company said the drug’s sales were slightly hurt by higher rebates that drugmakers offer to middlemen such as pharmacy benefit managers to make sure patients have access to their products.

Taltz sales rose about 37% to $420 million, also beating estimates of $395.75 million.

“With Trulicity and Taltz looking very strong relative to expectations and growth not being dampened by any competition or pricing, that’s more the focus for investors,” UBS analyst Navin Jacob told Reuters.

Lilly has been on a deal-making spree in recent years in a bid to increase products and sales in core franchises.

With this month’s $1.1 billion deal to buy skin disease specialist Dermira Inc, Lilly will gain access to Dermira’s late-stage experimental treatment for atopic dermatitis.

The acquisition helped the drugmaker slightly raise its 2020 revenue forecast to between $23.7 billion and $24.2 billion as it expects to benefit from Dermira’s Qbrexza, an approved medicated cloth to treat excessive armpit sweating.

Net income rose 33% to $1.50 billion from a year earlier, when it took a $329.4 million charge.

Excluding items, the company earned $1.73 per share, beating analysts’ average estimate of $1.52 per share, according to IBES estimates from Refinitiv.

Revenue rose 8.5% to $6.11 billion, above expectations of $5.91 billion.

Reporting by Manas Mishra and Saumya Sibi Joseph in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur

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