Lillys income drops in Q2, again affected by healthcare reform

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Eli Lilly has reported less income, despite higher overall worldwide sales in the 2010 second quarter, compared with last year’s second quarter.

Net income increased to $1.35 billion, compared with second quarter 2009 net income of $1.16 billion, according to the Indianapolis-based company.

In the second quarter of 2010, worldwide total revenue was $5.75 billion, an increase of 9 percent compared with the second quarter of 2009. Total revenue in the U.S. increased 8 percent to $3.26 billion due to higher prices and, to a lesser extent, increased volume. Total revenue outside the U.S. increased 9 percent to $2.49 billion due to increased demand and, to a lesser extent, the favorable impact of foreign exchange rates outside the Euro zone, partially offset by lower prices, Lilly said.

The company noted that the second quarter 2010 total revenue was reduced by approximately $70 million due to the impact of U.S. healthcare reform. This is the second quarter in a row in which Lilly has pointed to the impact of the healthcare reform legislation as partly to blame for a weak quarter.

Marketing, selling and administrative expenses increased 3 percent compared with the second quarter of 2009, to $1.76 billion. The increase was driven by higher marketing and selling expenses outside the U.S., partially offset by lower administrative expenses and company-wide cost containment efforts. Research and development expenses were $1.19 billion, compared with the second quarter of 2009. Research and development expenses grew 14 percent due primarily to increased costs of late-stage clinical trials and associated development milestones.

Its worldwide prasugrel (Effient) sales were $22.9 million in the second quarter of 2010, up from $8.8 million in the first quarter of 2010, the company said. U.S. Effient sales were $16.3 million. Sales outside the U.S. were $6.6 million.

For the second quarter of 2010, Lilly recognized total revenue of $106.9 million for exenatide (Byetta), a decrease of 7 percent. Worldwide sales of Byetta were $178.8 million in the second quarter of 2010, a 13 percent decrease compared with the second quarter of 2009, which according to the company was “due to competitive pressures in the U.S. and German markets.” U.S. sales of Byetta decreased 20 percent to $140.7 million compared with the second quarter of 2009, while sales of Byetta outside the U.S. grew 24 percent to $38.1 million.