Lilly Profit Rises on Demand for Newer Drugs

Eli Lilly Tuesday said fourth-quarter profit rose on lower taxes and better-than-expected sales of its medicines, including its newer treatments for depression, diabetes and cancer.

"Lilly had top-line strength across its portfolio, with each major therapeutic segment above our outlook," said Bear Stearns analyst John Boris. He noted the company's tax rate of

20.4 percent was less than his 22 percent forecast.

The Indianapolis-based drugmaker earned $854 million, or 78 cents per share. That compared with $132 million, or 12 cents per share, in the year-ago period, when Lilly took a big charge for a settlement with patients who claimed to have been harmed by its Zyprexa schizophrenia drug.

Top company officials remain upbeat about the future, despite signs of a softening economy.

"I'm not sure we can claim that our business is recession-proof, completely, but we stand by our guidance of double-digit earnings per share growth between now and 2011, compounded," Eli Lilly President & COO John Lechleiter told CNBC.

Lechleiter is scheduled to become the company's CEO on April 1.

Excluding special items, earnings rose 6 percent to 90 cents per share. Analysts on average had expected 89 cents per share, according to Reuters Estimates. The company took two charges, totaling 12 cents per share, related largely to restructuring and acquisitions.

Company global sales jumped 22 percent in the quarter to $5.19 billion, ahead of the Reuters Estimates forecast of $4.81 billion. Sales would have grown by 18 percent if not for the weak dollar, which boosts the value of overseas sales.

Sales of Zyprexa rose 10 percent to $1.27 billion, in a continuing rebound from earlier declines that had been sparked by concerns that the drug causes weight gains which raise diabetes risk.

Revenue from impotence treatment Cialis, which works far longer than Pfizer's Viagra and was recently approved in a new low-dose daily formulation, jumped 29 percent to $346 million.

Sales of Alimta, used to treat tumors caused by exposure to asbestos, soared 42 percent to $244 million, helped by its other approved use against lung cancer. Sales of Gemzar, an older lung cancer drug, rose 15 percent to $426 million.

Injectable diabetes drug Byetta, sold in partnership with Amylin Pharmaceuticals, gained ground from its wide use alongside oral treatments and its ability to help patients lose weight. Its global sales soared 34 percent to $184 million.

Humalog, a rapid-acting insulin used at mealtimes, was also a top performer during the quarter. Its sales jumped 18 percent to $414 million, helped by price increases and sizzling growth in overseas markets.

Lilly said it is on track to meet its 2008 earnings target, excluding special items, of $3.85 to $4 per share -- driven by growing demand for Cymbalta, Cialis, Byetta, Alimta and Humalog. That would reflect profit growth of 9 to 13 percent from 2007 results.

CNBC.com contributed to this article.