| "Eli Lilly & Company"(LLY)
|"Eli Lilly & Company" Graph source Edgar Online Pro on April 21st, 2006
The Following data is sourced from Yahoo Finance & the ANNUAL REPORT ON FORM 10-K For the Year Ended December 31, 2005 . The overview of the company was:
Eli Lilly and Company, through its subsidiaries, engages in the discovery, development, manufacture, and sale of pharmaceutical products in the United States and internationally. It offers neuroscience products, including Zyprexa for schizophrenia, bipolar mania, and bipolar maintenance; Cymbalta for depression and diabetic peripheral neuropathic pain; Strattera for attention-deficit hyperactivity disorder in children, adolescents, and adults; Prozac for depression, and for bulimia and obsessive-compulsive disorders; Permax for Parkinson’s disease; Sarafem for pre-menstrual dysphoric disorders; Symbyax for bipolar depression; and Yentreve for stress urinary incontinence. The company also provides endocrine products that comprise Humalog, Humalog Mix 75/25, Humalog Mix 50/50, and Humulin for diabetes; Actos and Byetta for type 2 diabetes; Evista, an oral agent for the prevention and treatment of osteoporosis in post-menopausal women; Humatrope for human growth hormone deficiency and idiopathic short stature; and Forteo for severe osteoporosis in women and men. Its oncology products include Gemzar for pancreatic cancer; Alimta for malignant pleural mesothelioma and non-small cell lung cancer. The company also offers animal health products, including Tylan, which is used to control certain diseases in cattle, swine, and poultry; Rumensin, a cattle feed additive; Coban, Monteban, and Maxiban for use in poultry; Apralan that is used to control enteric infections in calves and swine; Micotil, Pulmotil, and Pulmotil AC, which are used to treat respiratory disease in cattle, swine, and poultry; Surmax for swine and poultry; Paylean and Optaflexx, which are used as leanness and performance enhancers for swine and cattle; and Elector, a parasiticide for use on cattle and premises. It serves hospitals, pharmacies, physicians, and other health care professionals. The company was founded by Colonel Eli Lilly in 1876 and is based in Indianapolis, Indiana.
Our principal products are:
Neuroscience products, our largest-selling product group, including:
• Zyprexa ® , for the treatment of schizophrenia, bipolar mania and bipolar maintenance
• Cymbalta ® , for the treatment of depression and diabetic peripheral neuropathic pain
• Strattera ® , for the treatment of attention-deficit hyperactivity disorder in children, adolescents and adults
• Prozac ® , for the treatment of depression and, in many countries, for bulimia and obsessive-compulsive disorder
• Permax ® , for the treatment of Parkinson’s disease
• Sarafem ® , for the treatment of pre-menstrual dysphoric disorder
• Symbyax ® , for the treatment of bipolar depression
• Yentreve ® , for the treatment of stress urinary incontinence (approved in 2004 in the European Union and several other countries outside the United States).
Endocrine products, including:
• Humalog ® , Humalog Mix 75/25 ® , and Humalog Mix 50/50 ™ , injectable human insulin analogs for the treatment of diabetes
• Humulin ® , injectable human insulin for the treatment of diabetes
• Actos ® , an oral agent for the treatment of type 2 diabetes
• Byetta ® , an injectable product for the treatment of type 2 diabetes
• Evista ® , an oral agent for the prevention and treatment of osteoporosis in post-menopausal women
• Humatrope ® , for the treatment of human growth hormone deficiency and idiopathic short stature
• Forteo ® , an injectable treatment for severe osteoporosis in women and men.
Oncology products, including:
• Gemzar ® , for the treatment of pancreatic cancer; in combination with other agents, for treatment of metastatic breast cancer and non-small cell lung cancer; and in the European Union for bladder and ovarian cancers
• Alimta ® , for the treatment of malignant pleural mesothelioma and for second-line treatment of non- small cell lung cancer (approved in 2004 in the U.S. and several other countries).
Animal health products, including:
• Tylan ® , an antibiotic used to control certain diseases in cattle, swine, and poultry
• Rumensin ® , a cattle feed additive that improves feed efficiency and growth and also controls and prevents coccidiosis
• Coban ® , Monteban ® and Maxiban ® , anticoccidial agents for use in poultry
• Apralan ® , an antibiotic used to control enteric infections in calves and swine
• Micotil ® , Pulmotil ® , and Pulmotil AC ® , antibiotics used to treat respiratory disease in cattle, swine, and poultry, respectively
• Surmax ® (sold as Maxus ® in some countries), a performance enhancer for swine and poultry
• Paylean ® and Optaflexx ® , leanness and performance enhancers for swine and cattle, respectively
• Elector ® , a parasiticide for use on cattle and premises.
Cardiovascular agents, including:
• ReoPro ® , a treatment for use as an adjunct to percutaneous coronary intervention (“PCI”), including patients undergoing angioplasty, atherectomy or stent placement
• Xigris ® , for the treatment of adults with severe sepsis at high risk of death.
• Ceclor ® , for the treatment of a wide range of bacterial infections
• Vancocin ® HCl, used primarily to treat staphylococcal infections.
Other pharmaceutical products, including:
• Cialis ® , for the treatment of erectile dysfunction.
Highlights of Risks Related to Our (LLY) Business
For further detail please review the 10 K Form in detail.
In addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating our company. It is possible that our business, financial condition, liquidity or results of operations could be materially adversely affected by any of these risks.
• We face intense competition. We compete with large number of multinational pharmaceutical companies, biotechnology companies and generic pharmaceutical companies. To compete successfully, we must continue to deliver to the market innovative, cost-effective products that meet important medical needs. Our product sales can be adversely affected by the introduction by competitors of branded products that are perceived as superior by the marketplace, by generic versions of our branded products, and by generic versions of other products in the same therapeutic class as our branded products. See Item 1, “Business — Competition,” for more details.
• Our long-term success depends on intellectual property protection. Our long-term success depends on our ability to continually discover, develop, and commercialize innovative new pharmaceutical products. Without strong intellectual property protection, we would be unable to generate the returns necessary to support the enormous investments in research and development, capital, and other expenditures required to bring new drugs to the market. We currently expect no major patent expirations in this decade, but several major products will lose intellectual property protection in the first half of the next decade.
Intellectual property protection varies throughout the world and is subject to change over time. In the U.S., the Hatch-Waxman Act provides generic companies powerful incentives to seek to invalidate our patents; as a result, we expect that our U.S. patents on major products will be routinely challenged, and there can be no assurance that our patents will be upheld. See Item 1, “Business — Patents, Trademarks, and Other Intellectual Property Protection”, for more details. In addition, competitors or other third parties may claim that our activities infringe patents or other intellectual property rights held by them. If successful, such claims could result in our being unable to market a product in a particular territory or being required to pay damages for past infringement or royalties on future sales.
• Our business is subject to increasing government price controls and other health care cost containment measures. Government health care cost-containment measures can significantly affect our sales and profitability. In many countries outside the United States, government agencies strictly control, directly or indirectly, the prices at which our products are sold. In the United States, we are subject to substantial pricing pressures from state Medicaid programs and private insurance programs, including those operating under the new Medicare pharmaceutical benefit effective January 2006. We expect pricing pressures to increase. See Item I, “Business — Regulations Affecting Pharmaceutical Pricing and Reimbursement” for more details.
• Pharmaceutical research and development is costly and uncertain. There are many difficulties and uncertainties inherent in new product development and introduction of new products. New product candidates that appear promising in development may fail to reach the market or may have only limited commercial success because of efficacy or safety concerns, inability to obtain necessary regulatory approvals, limited scope of approved uses, difficulty or excessive costs to manufacture, or infringement of the patents or intellectual property rights of others. Delays and uncertainties in the FDA approval process and the approval processes in other countries can result in delays in product launches and lost market opportunity. In addition, it can be very difficult to predict sales growth rates of new products.
• Pharmaceutical products can develop unexpected safety or efficacy concerns. Unexpected safety or efficacy concerns can arise with respect to marketed products, whether or not scientifically justified, leading to product recalls, withdrawals, or declining sales, as well as product liability claims.
• Zyprexa contributes a major portion of our sales and earnings. Zyprexa, our largest-selling product, contributes a significant proportion of our total sales and income, and we believe Zyprexa will continue to be a major contributor to our sales and earnings for several years. An unexpected steep and extended decline in Zyprexa sales (resulting from, for example, an unexpected safety or efficacy concern, regulatory action, or premature loss of patent protection) could have a material adverse impact on our results of operations, financial condition and liquidity.
• Regulatory compliance failures could be damaging to the company. The marketing, promotional, and pricing practices of pharmaceutical manufacturers, as well as the manner in which manufacturers interact with purchasers and prescribers, are subject to extensive regulation. Many companies, including Lilly, have been subject to claims related to these practices asserted by federal and state governmental authorities and private payors and consumers. These claims could result in substantial expense to the company. In particular, See Item 7, “Management’s Discussion and Analysis — Legal and Regulatory Matters”, for the discussions of the U.S. sales and marketing practices investigations. In addition, regulatory issues concerning compliance with current Good Manufacturing Practice (cGMP) regulations for pharmaceutical products can lead to product recalls and seizures, interruption of production leading to product shortages, and delays in the approvals of new products pending resolution of the cGMP issues. See Item 1, “Business — Regulation of our Operations”, for more details.
• We face many product liability claims today, and future claims will be largely self-insured. We are subject to a substantial number of product liability claims involving primarily Zyprexa, DES, and thimerosal, and because of the nature of pharmaceutical products, it is possible that we could become subject to large numbers of product liability claims for other products in the future. See Item 7, “Management’s Discussion and Analysis — Legal and Regulatory Matters” and Item 3, “Legal Proceedings”, for more information on our current product liability litigation. We have experienced difficulties in obtaining product liability insurance due to a very restrictive insurance market, and therefore will be largely self-insured for future product liability losses. In addition, there is no assurance that we will be able to fully collect from our insurance carriers on past claims.
• Manufacturing difficulties could lead to product supply problems. Pharmaceutical manufacturing is complex and highly regulated. Manufacturing difficulties can result in product shortages, leading to lost sales. See Item 1, “Business — Raw Materials and Product Supply,” for more details.
• We face other risks to our business and operating results. Our business is subject to a number of other risks and uncertainties, including:
• Economic factors over which we have no control, including changes in inflation, interest rates and foreign currency exchange rates, and overall economic conditions in volatile areas can affect our results of operations.
• Changes in tax laws, including laws related to the remittance of foreign earnings or investments in foreign countries with favorable tax rates, and settlements of federal, state, and foreign tax audits, can affect our net income.
• Changes in accounting standards promulgated by the Financial Accounting Standards Board, the Securities and Exchange Commission, and the Emerging Issues Task Force can affect reported results.
• Our results can also be affected by internal factors, such as changes in business strategies and the impact of restructurings, asset impairments, technology acquisition and disposition transactions, and business combinations.
Cautionary Statement Regarding Forward-Looking Statements
We have made certain forward-looking statements in this Form 10-K, and company spokespeople may make such statements in the future based on then-current expectations of management. Where possible, we try to identify forward-looking statements by using such words as “expect,” “plan,” “will,” “estimate,” “forecast,” “project,” “believe,” “anticipate,” and similar expressions. Forward-looking statements do not relate strictly to historical or current facts. They are likely to address our growth strategy, sales of current and anticipated products, financial results, the results of our research and development programs, the status of product approvals, and the outcome of contingencies such as litigation and investigations. All forward-looking statements made by us are subject to risks and uncertainties, including those summarized above, that may cause actual results to differ materially from our expectations.
We undertake no duty to update forward-looking statements.
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