By TOM MURPHY and MARLEY SEAMAN AP Business Writers KINDIANAPOLIS (AP) — Eli Lilly & Co. said Thursday it swung to a fourth-quarter loss on charges from buying cancer-drug maker ImClone Systems Inc. But Lilly’s earnings without those charges beat analyst estimates despite flat sales and a 10 percent decline in revenue from its top seller, the anti-psychotic Zyprexa. Indianapolis-based Lilly lost $3.63 billion, or $3.31 per share in the quarter. That compares with earnings of $854.4 million, or 78 cents per share, a year ago. Lilly said sales edged up to $5.21 billion from $5.19 billion, below analyst estimates.Excluding one-time items, Lilly earned $1.07 per share. Analysts expected $1.05 per share on $5.42 billion in revenue. The results include a $4.73 billion charge for the ImClone purchase. Sales of Zyprexa fell to $1.15 billion due to decreased wholesale buying in the U.S. and lower foreign sales because of lower prices and less-favorable exchange rates. For the year, Zyprexa sales slipped 1 percent, to $4.7 billion. The drug made up 22 percent of Lilly’s sales last year, down from 25 percent in 2007. Other key drugs fared better. Revenue from Lilly’s second-best seller, the antidepressant Cymbalta, rose 15 percent to $721.2 million in the fourth quarter. Sales of Humalog insulin grew 11 percent to $457.9 million. While overall sales were flat, the drugmaker said marketing, selling and administrative expenses fell 2 percent to $1.7 billion in the quarter. It was the second consecutive quarterly loss for Lilly. The company took a loss in the third quarter after setting aside $1.42 billion to settle criminal and civil investigations into its marketing practices for Zyprexa. Lilly was accused in a misdemeanor charge of marketing the drug to primary care doctors and as a treatment for dementia even though it isn’t approved for that purpose. The drugmaker agreed to a corporate integrity agreement as part of a recently announced resolution. Chairman and Chief Executive John Lechleiter said Thursday Lilly “deeply regrets” the actions covered in the plea. “Our obligations in the corporate integrity agreement are clear,” he said. “We take them very seriously, and we will ensure that Lilly is fully compliant.” For the year, eight Lilly drugs made more than $1 billion in sales, up from six in 2007. Lilly lost $2.07 billion in 2008. Excluding one-time items, its adjusted profit rose to $4.02 per share, from $3.54 per share in 2007. Revenue grew 9 percent, to $20.38 billion. Lilly backed its profit forecast of $4 to $4.25 per share for 2009. Analysts expect $4.19 per share. Lilly reported earnings the same day another round of mass layoffs was announced in the industry. British drugmaker AstraZeneca PLC said it would cut 6,000 jobs globally by 2013 to shore up earnings. The company said net income fell to $1.25 billion in the fourth quarter, down slightly from $1.27 billion in the same quarter last year. Pfizer Inc., which is buying rival drugmaker Wyeth in a $68 billion deal, said Monday it will slash 8,000 jobs. Lilly has reduced employment by 12 percent, or more than 5,000 people, since the summer of 2004. A total of 335 people accepted buyouts last year, and the company finished 2008 with 40,450 employees. “We intend to continue to manage our headcount diligently and transform our expense base moving forward,” Lechleiter said.
