Eli Lilly and Company announced financial results for the third quarter of 2018.
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In the third quarter of 2018, worldwide revenue was $6.062 billion, an increase of 7 percent compared with the third quarter of 2017.
The increase in revenue was driven by a 12 percent increase due to volume, partially offset by a 4 percent decrease due to lower realized prices and a 1 percent decrease due to the unfavorable impact of foreign exchange rates.
Revenue in the U.S. increased 11 percent, to $3.447 billion, driven primarily by increased volume for new pharmaceutical products, including Trulicity, Basaglar, Taltz, and Verzenio.
The increase in revenue was partially offset by lower realized prices, primarily driven by Basaglar, Humalog and Taltz, as well as decreased volume for products that have lost exclusivity, including Cialis, Stratteraand Effient.
Revenue outside the U.S. increased 2 percent, to $2.615 billion, driven by increased volume of 8 percent, which was primarily for new pharmaceutical products, including Trulicity, Olumiant and Taltz.
The increase in revenue was partially offset by lower realized prices for several pharmaceutical products, decreased volume for Cialis due to loss of exclusivity, as well as the unfavorable impact of foreign exchange rates.
Gross margin increased 11 percent, to $4.500 billion, in the third quarter of 2018 compared with the third quarter of 2017.
Gross margin as a percent of revenue was 74.2 percent, an increase of 2.2 percentage points compared with the third quarter of 2017.
The increase in gross margin percent was primarily due to manufacturing efficiencies and, to a lesser extent, the effect of foreign exchange rates on international inventories sold and the favorable impact of product mix, partially offset by the negative impact of price on revenue.
Operating expenses in the third quarter of 2018, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 1 percent to $2.960 billion.
Research and development expenses remained flat at $1.343 billion, or 22.2 percent of revenue, as additional late-stage development expenditures were offset by lower development milestone payments compared to the third quarter of 2017.
Marketing, selling, and administrative expenses increased 2 percent, to $1.617 billion, primarily due to increased expenses related to new pharmaceutical product launches, partially offset by reduced expenses on late life-cycle products. Both research and development expenses and marketing, selling, and administrative expenses benefited from previously-announced actions taken to reduce the company's cost structure. ■