Friday, June 21, 2013

Patent Losses to Stall Sales Growth at Eli Lilly

Having spent $5.28 billion on R&D in 2012, up from $4.88 billion in 2010 – and with approximately 60 potential new drugs in human testing -- management at Eli Lilly (LLY-$49.89) is confident that post-2014 it can mitigate the adverse impact of patent expirations and return the company to resumption of profitable growth through a combination of cost-controls (layoffs and co-product terminations) and successful commercial launch of innovative molecular entities, currently either in late-stage research or awaiting FDA regulatory review.

Unfortunately, an analysis of the most-heralded of these products suggests that the timing of peak sales for these drugs could substantially lag the loss of up to $8 billion, or some 36% in revenue, due to generic intrusion.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

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