Eli Lilly forecasts that its profit will fall by up to one-third this year, Reuters has reported. The drugmaker’s forecasted revenue for 2014 is now between $19.2 billion and $19.8 billion, with a net income of $3 billion and operating cash flow of $4 billion.
The profit fall is in line with the company’s expectations, however, as Lilly will feel most sharply this year the effect of the patent cliff that began in October 2011 with the loss of U.S. patent protection for its schizophrenia treatment Zyprexa. At its peak Zyprexa had annual sales of more than $5 billion but now brings in $1 billion. This March the company’s osteoporosis drug Evista, with annual sales of $1 billion, will also be open to generic competion.
The company is now pinning its hopes on the experimental drug ramucirumab, which has been proven to prolong the survival of stomach cancer patients in late-stage clinical trials. Lilly Chief John Lechleiter also confirmed that diabetes drugs will remain “a company mainstay”. The company has two experimental diabetes drugs in late-stage trials, the injectable medicine dulaglutide and a basal insulin.
Atlantic Equities analyst Richard Purkiss told Reuters that he expects Lilly’s revenue to “bounce back strongly in 2015, and for the company to have mid-teens percentage growth in earnings from 2014 to 2017.”