Eli Lilly 2007 Annual Report Download - page 19

FINANCIALS
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The following table summarizes our net sales activity in 2006 compared with 2005:
Year Ended Year Ended Percent
December 31, 2006 December 31, 2005 Change
Product U.S.1 Outside U.S. Total Total from 2005
(Dollars in millions)
Zyprexa . . . . . . . . . . . . . . . . . . . . . . $ 2,106.2 $2,257.4 $ 4,363.6 $ 4,202.3 4
Gemzar . . . . . . . . . . . . . . . . . . . . . . 609.8 798.3 1,408.1 1,334.5 6
Cymbalta. . . . . . . . . . . . . . . . . . . . . 1,158.7 157.7 1,316.4 679.7 94
Humalog . . . . . . . . . . . . . . . . . . . . . 811.0 488.5 1,299.5 1,197.7 9
Evista. . . . . . . . . . . . . . . . . . . . . . . . 664.0 381.3 1,045.3 1,036.1 1
Humulin. . . . . . . . . . . . . . . . . . . . . . 367.9 557.4 925.3 1,004.7 (8)
Animal health products. . . . . . . . . 405.9 469.6 875.5 863.7 1
Alimta . . . . . . . . . . . . . . . . . . . . . . . 350.1 261.7 611.8 463.2 32
Forteo . . . . . . . . . . . . . . . . . . . . . . . 416.2 178.1 594.3 389.3 53
Strattera . . . . . . . . . . . . . . . . . . . . . 509.2 69.8 579.0 552.1 5
Actos . . . . . . . . . . . . . . . . . . . . . . . . 279.1 169.4 448.5 493.0 (9)
Humatrope . . . . . . . . . . . . . . . . . . . 202.3 213.3 415.6 414.4 0
Byetta . . . . . . . . . . . . . . . . . . . . . . . 219.0 — 219.0 39.6 NM
Cialis2 . . . . . . . . . . . . . . . . . . . . . . . 3.7 212.1 215.8 169.9 27
Other pharmaceutical products. . 496.1 877.2 1,373.3 1,805.1 (24)
Total net sales . . . . . . . . . . . . . . $8,599.2 $7,091.8 $15,691.0 $14,645.3 7
NM—Not meaningful
1U.S. sales include sales in Puerto Rico.
2Cialis had worldwide 2006 sales of $971.0 million, representing an increase of 30 percent compared with 2005. The sales shown in
the table above represent results only in the territories in which we marketed Cialis exclusively. The remaining sales relate to the
joint-venture territories of Lilly ICOS LLC (North America, excluding Puerto Rico, and Europe). Our share of the joint-venture territory
sales, net of expenses and income taxes, is reported in other income—net in our consolidated statements of income.
to higher prices, offset partially by a decline in demand.
Outside the U.S., sales of Evista decreased 1 percent,
driven by lower prices, offset by an increase in demand.
Sales of Alimta increased 18 percent and 57 percent
in the U.S. and outside the U.S., respectively, due pri-
marily to increased demand.
Sales of Forteo increased 57 percent in the U.S. In
addition to increased demand, U.S. sales signifi cantly
benefi ted from patients’ access to medical coverage
through the Medicare Part D program and from de-
creased utilization of our U.S. patient assistance pro-
gram, LillyAnswers. Sales outside the U.S. increased
43 percent, refl ecting strong demand.
Sales of Strattera increased 2 percent in the U.S.
due to higher prices as well as the reductions in U.S.
wholesaler inventory levels in 2005, offset by a decline
in demand. Sales outside the U.S. increased 31 percent
due primarily to increased demand in addition to a mod-
est favorable impact of foreign exchange rates, offset
partially by lower prices.
Total product sales of Cialis increased 38 percent
in the U.S. and 24 percent outside the U.S. Worldwide
Cialis sales growth refl ects the impact of market share
gains, market growth, and price increases during 2006.
Animal health product sales in the U.S. increased
10 percent, due primarily to increased demand led
by Rumensin® and Tylan®. Sales outside the U.S. de-
creased 5 percent, driven primarily by the decrease
in the sales of Surmax® as a result of the European
Union’s growth promotion use ban on the product,
effective January 1, 2006.
Gross Margin, Costs, and Expenses
The 2006 gross margin increased to 77.4 percent of
sales compared with 76.3 percent for 2005. This in-
crease was primarily due to increased product prices
and increased production volume, partially offset by
higher manufacturing expenses.
Operating expenses increased 7 percent in 2006.
Investment in research and development increased
3 percent, to $3.13 billion, primarily due to increases in
discovery research and clinical trial costs. We contin-
ued to be a leader in our industry peer group by invest-
ing approximately 20 percent of our sales into research
and development during 2006. Marketing, selling, and
administrative expenses increased 9 percent in 2006, to
$4.89 billion. This increase was largely attributable to
increased marketing and selling expenses in support of
key products, primarily Cymbalta and the diabetes care
franchise, and an increase in litigation-related costs.
Other income—net decreased $76.4 million, to
$237.8 million.
• Interest expense for 2006 increased $132.9 million,
to $238.1 million. This increase was a result of higher