Eli Lilly 2012 Annual Report Download - page 36

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24
Financial Results
Worldwide total revenue decreased 7 percent to $22.60 billion in 2012, driven by steep sales declines for
Zyprexa due to the loss of patent exclusivity in most major markets, partially offset by growth in certain other
products. Net income and EPS decreased 6 percent to $4.09 billion and $3.66, respectively, in 2012 compared
with net income of $4.35 billion and EPS of $3.90 in 2011. The decreases in net income and EPS were due to
the loss of patent exclusivity for Zyprexa, partially offset by growth in certain other products and higher other
income from the early payment of the exenatide revenue-sharing obligation from Amylin Pharmaceuticals,
Inc. (Amylin). The following highlighted items affect comparisons of our 2012 and 2011 financial results:
2012
Collaborations (Note 4 to the consolidated financial statements)
• We recognized income of $787.8 million (pretax), or $0.43 per share, related to the early payment of
the exenatide revenue-sharing obligation following the completion of Amylin's acquisition by Bristol-
Myers Squibb (BMS).
Asset Impairments, Restructuring, and Other Special Charges (Note 5 to the consolidated financial
statements)
• We recognized asset impairments, restructuring, and other special charges of $281.1 million (pretax),
or $0.16 per share, consisting of an intangible asset impairment related to liprotamase, restructuring
charges related to initiatives to reduce our cost structure and global workforce, charges associated
with the decision to stop development of a delivery device platform, and charges related to changes in
returns reserve estimates for the withdrawal of Xigris™.
2011
Collaborations (Note 4 to the consolidated financial statements)
• We incurred acquired in-process research and development (IPR&D) charges associated with the
diabetes collaboration with Boehringer Ingelheim of $388.0 million (pretax), or $0.23 per share.
Asset Impairments, Restructuring, and Other Special Charges (Note 5 to the consolidated financial
statements)
• We recognized charges of $316.4 million (pretax), or $0.24 per share, primarily related to severance
costs from strategic actions to reduce our cost structure and global workforce.
• We incurred a charge of $85.0 million (pretax), or $0.05 per share, primarily for returned product and
contractual commitments related to the withdrawal of Xigris.
Late-Stage Pipeline
Our long-term success depends to a great extent on our ability to continue to discover and develop innovative
pharmaceutical products and acquire or collaborate on compounds currently in development by other
biotechnology or pharmaceutical companies. We currently have approximately 60 potential new drugs in
human testing or under regulatory review, and a larger number of projects in preclinical research.
The following new molecular entities (NMEs) are currently in Phase III clinical trial testing for potential use in
the diseases described. The quarter in which the NME initially entered Phase III for any indication is shown in
parentheses:
Baricitinib (Q4 2012)—a Janus tyrosine kinase (JAK 1 and JAK 2) inhibitor for the treatment of
inflammatory and autoimmune diseases (in collaboration with Incyte Corporation)
Dulaglutide* (Q4 2008)—a long-acting analog of glucagon-like peptide 1 for the treatment of type 2
diabetes
Edivoxetine (Q4 2010)—a norepinepherine reuptake inhibitor for the treatment of major depression
Empagliflozin (Q3 2010)—a sodium glucose co-transporter-2 (SGLT-2) inhibitor for the treatment of
type 2 diabetes (in collaboration with Boehringer Ingelheim)