Apparently, launching new drugs can have some side effects. Eli Lilly
Lilly's touting a strong pipeline, mentioning six new products either launched or on the way. However, the company said that kicking off these drugs will result in marketing expenses that will subdue profits.
It also reminded investors to expect a onetime charge related to its acquisition of Applied Molecular Evolution
Lilly expects first-quarter earnings of $0.65 to $0.67 a share (excluding the charge), and 2004 earnings of $2.80 to $2.85 per share, compared to $2.58 per share in 2003. However, analysts were looking for earnings of $2.92 per share for 2004.
It stands to reason that new drugs go hand in hand with increased marketing expenses, as the firm will have sales reps hitting the streets to push its newest products. Many of us (especially doctors out there) know these firms are masters of marketing. However, an increased amount of marketing that was not forecast before might make one wonder if competition is adding up to more than Lilly previously anticipated.
Just last week, Lilly announced that Symbyax (for bipolar disorder) will arrive in pharmacies by the middle of this month. Among other well-known Lilly launches are impotence med Cialis, to challenge Pfizer's
With so many big-name pharmaceutical companies taking flak for weak drug pipelines, Lilly's delivering to market some medications with substantial sales prospects. However, Lilly's also delivering a high share price -- and that may be the side effect that worries investors most of all.
How do you think things are looking for Lilly? Talk it over with other Fools on the Eli Lilly discussion board.
Alyce Lomax welcomes your feedback at email@example.com.