LEL Lilly(Eli)

 
TIDMLEL 
 
Date: January 5, 2012 
 
For Release: Immediately 
 
Refer to: (317) 276-5795 - Mark E. Taylor (Media) 
 
(317) 655-6874 - Philip Johnson (Investors) 
 
Lilly Comments on 2011 Financial Guidance and Announces 2012 Financial Guidance 
 
  * Company expects to meet or exceed 2011 EPS guidance. 
 
  * 2012 financial guidance reflects revenue and earnings declines due to 
    Zyprexa patent expiration. 
 
  * 2012 revenue anticipated to be between $21.8 billion and $22.8 billion 
 
  * Company expects to keep 2012 operating expenses essentially flat versus 
    2011. 
 
  * 2012 earnings per share forecasted to be in the range of $3.10 - $3.20. 
 
  * R&D pipeline includes 12 molecules in Phase III development at end of 2011, 
    exceeding goal of 10 
 
  * Mid-term guidance through 2014 reconfirmed with minimum annual results of 
    at least $20 billion in revenue, $3 billion in net income and $4 billion in 
    operating cash flow. 
 
  * Company reaffirms commitment to fund dividend at least at current level. 
 
INDIANAPOLIS, IN - Eli Lilly and Company (NYSE: LLY) today commented on its 
2011 financial guidance and announced its financial guidance for 2012. The 
company also reconfirmed its mid-term guidance through 2014. 
 
For 2011, the company expects to meet or exceed its current earnings per share 
guidance. 2011 EPS guidance is currently in the range of $3.84 to $3.89 on a 
reported basis, or $4.30 to $4.35 on a non-GAAP basis when excluding $.23 of 
in-process research and development charges associated with the Boehringer 
Ingelheim collaboration and $.18 of asset impairment and restructuring charges 
through the first nine months of 2011, as well as an estimated $.05 asset 
impairment charge in the fourth quarter of 2011 related to the Xigris® 
withdrawal. For 2012, the company expects earnings per share to be in the range 
of $3.10 to $3.20 on both a reported and non-GAAP basis. 
 
"2012 is an important year for Lilly, having entered the period when we face 
patent expirations on some of our largest products, most notably Zyprexa® late 
last year and Cymbalta® in the U.S. at the end of 2013," said John C. 
Lechleiter, Ph.D., Lilly's chairman, president and chief executive officer. 
"We've been preparing to meet these challenges for many years, and have the 
plans in place to enable us to bridge this period and return to sustainable 
growth after 2014. We remain focused on executing this plan." 
 
"Our 2012 financial guidance reflects the three key elements of our bridging 
strategy," continued Lechleiter. "First and foremost, we are replenishing and 
advancing our pipeline. We've successfully rebuilt our mid- to late-stage 
pipeline to position Lilly for growth post-2014, with 12 assets now in Phase 
III, exceeding our goal of 10 by the end of 2011. We continue to revamp our 
discovery efforts to ensure a more sustainable flow of innovation for the 
long-term. Second, we're investing to drive growth in the key brands that don't 
lose patent protection during this period and in our countercyclical growth 
engines that don't have the same cycle of patent expirations as our U.S. and 
European pharmaceutical businesses. These include Japan, select emerging 
markets and our animal health business. Third, we continue to drive 
productivity gains across our business to fund the R&D necessary to fuel our 
future growth, recapitalize our physical assets and maintain our dividend at 
least at its current level." 
 
Derica Rice, Lilly executive vice president, global services and chief 
financial officer, commented on the company's mid-term financial guidance 
through 2014. "We remain on track to meet or exceed the mid-term minimum 
financial performance outlined this past June. From now through 2014, on an 
annual basis we still expect revenue to be at least $20 billion, net income to 
be at least $3 billion, and operating cash flow to be at least $4 billion." 
 
2012 Financial Guidance 
 
The company expects full-year 2012 earnings per share to be in the range of 
$3.10 to $3.20 on both a reported and non-GAAP basis. 
 
The company anticipates 2012 revenue of between $21.8 and $22.8 billion. This 
includes an expected decline of over $3 billion in Zyprexa sales due to patent 
expirations in most markets outside of Japan. The reduction in revenue due to 
Zyprexa patent expirations is expected to be partially offset by growth in key 
franchises including Cymbalta, Cialis®, Humalog®, Humulin® and Forteo®, as well 
as continued growth of newer products such as Effient®, Axiron® and Tradjenta®. 
The company also anticipates continued strong, double-digit revenue growth from 
its Elanco Animal Health business. Both Japan and Emerging Markets are expected 
to post continued strong underlying volume growth; however, overall revenue 
growth in these markets in 2012 will be adversely affected by anticipated 
pricing actions in Japan and by the expected impact of patent expirations, 
including Zyprexa, in some emerging market countries. 
 
The company anticipates that gross margin as a percent of revenue will be 
approximately 77 percent. 
 
As a result of ongoing productivity efforts, the company expects to keep 
operating expenses essentially flat compared to 2011. Marketing, selling and 
administrative expenses are expected to be flat to declining and in the range 
of $7.4 billion to $7.8 billion. Research and development expense is expected 
to be flat to increasing and in the range of $5.0 billion to $5.3 billion. 
 
Other income and deductions is expected to be in a range between net expense of 
$50 million and net income of $100 million. 
 
The 2012 tax rate is expected to be approximately 21 percent, and assumes the 
extension of the R&D tax credit for the full year 2012. 
 
Operating cash flows are expected to be more than sufficient to fund capital 
expenditures of approximately $800 million, as well as anticipated business 
development activity and the company's current dividend. 
 
Webcast of Conference Call 
 
As previously announced, investors, media and the general public can access a 
live webcast of the 2012 financial guidance conference call through a link on 
Lilly's website at www.investor.lilly.com. The conference call will be held 
today beginning at 9:30 a.m. Eastern Standard Time (EST) and will be available 
for replay via the website through March 2, 2012. 
 
Lilly, a leading innovation-driven corporation, is developing a growing 
portfolio of pharmaceutical products by applying the latest research from its 
own worldwide laboratories and from collaborations with eminent scientific 
organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - 
through medicines and information - for some of the world's most urgent medical 
needs. Additional information about Lilly is available at www.lilly.com; 
Lilly's clinical trial registry is available at www.lillytrials.com. 
 
F-LLY 
 
This press release contains forward-looking statements that are based on 
management's current expectations, but actual results may differ materially due 
to various factors. There are significant risks and uncertainties in 
pharmaceutical research and development. There can be no guarantees with 
respect to pipeline products that the products will receive the necessary 
clinical and manufacturing regulatory approvals or that they will prove to be 
commercially successful. Pharmaceutical products can develop unexpected safety 
or efficacy concerns. The company's results may also be affected by such 
factors as competitive developments affecting current products, including the 
impact of generic competition; market uptake of recently-launched products; the 
timing of anticipated regulatory approvals and launches of new products; 
regulatory actions regarding currently marketed products; issues with product 
supply; regulatory changes or other developments; regulatory compliance 
problems or government investigations; patent disputes; changes in patent law 
or regulations related to data-package exclusivity; other litigation involving 
current or future products; the impact of governmental actions regarding 
pricing, importation, and reimbursement for pharmaceuticals, including U.S. 
health care reform; changes in tax law; asset impairments and restructuring 
charges; acquisitions and business development transactions; and the impact of 
exchange rates and global macroeconomic conditions. For additional information 
about the factors that affect the company's business, please see the company's 
latest Form 10-Q and Form 10-K filed with the U.S. Securities and Exchange 
Commission. The company undertakes no duty to update forward-looking 
statements. 
 
# # # 
 
Alimta® (pemetrexed, Lilly) 
 
Axiron® (testosterone, Acrux Corp.) 
 
Cialis® (tadalafil, Lilly) 
 
Cymbalta® (duloxetine hydrochloride, Lilly) 
 
Effient® (prasugrel, Lilly) 
 
Forteo® (teriparatide [rDNA origin] injection, Lilly) 
 
Humalog® (insulin lispro injection of recombinant DNA origin, Lilly) 
 
Humulin® (human insulin of recombinant DNA origin, Lilly) 
 
Tradjenta® (linagliptin, Boehringer Ingelheim) 
 
Xigris® (drotrecogin alfa (activated)), Lilly 
 
Zyprexa® (olanzapine, Lilly) 
 
 
 
                                     - 4 - 
 
 
 
Eli Lilly and Company 
 
Lilly Corporate Center 
 
Indianapolis, Indiana 46285 
 
U.S.A. 
 
www.lilly.com 
 
 
 
 
END 
 

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