In the fourth quarter of 2019, worldwide revenue was $6.114 billion, an increase of 8 percent compared with the fourth quarter of 2018.
The increase in revenue was driven by a 10 percent increase due to volume, partially offset by a 1 percent decrease due to lower realized prices.
Revenue in the U.S. increased 7 percent, to $3.519 billion, as increased volume of 8 percent was partially offset by lower realized prices.
Increased U.S. volume for key growth products including Trulicity, Taltz, Verzenio, Jardiance, Emgality and Basaglar, was partially offset by decreased volume for Cialis due to loss of patent exclusivity, lower volume for Forteo, as well as the impact from the product withdrawal of Lartruvo.
Revenue outside the U.S. increased 10 percent, to $2.595 billion, driven by increased volume of 12 percent, which was primarily from key growth products, including Trulicity, Olumiant, Taltz, Verzenio, and Jardiance, partially offset by decreased volume for Strattera due to loss of patent exclusivity and the impact of the product withdrawal of Lartruvo.
In addition, revenue outside the U.S. benefited from a milestone from Bayer Consumer Care AG resulting from its exclusive development and commercialization license for Vitrakvi.
The increase in revenue due to volume was partially offset by the unfavorable impact of foreign exchange rates and lower realized prices.
Gross margin increased 7 percent, to $4.831 billion, in the fourth quarter of 2019 compared with the fourth quarter of 2018.
Gross margin as a percent of revenue was 79.0 percent, a decrease of 1.0 percentage point compared with the fourth quarter of 2018.
The decrease in gross margin percent was primarily due to unfavorable product mix, the unfavorable effect of foreign exchange rates on international inventories sold, higher intangibles amortization expense, and the impact of lower realized prices on revenue.
Total operating expenses in the fourth quarter of 2019, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 6 percent to $3.280 billion compared with the fourth quarter of 2018.
Research and development expenses increased 14 percent to $1.581 billion, or 25.9 percent of revenue, driven by higher development expenses for late-stage assets.
Marketing, selling, and administrative expenses remained relatively flat at $1.698 billion, as lower spending on late life-cycle products and ongoing cost containment measures were offset by increased expenses for recently launched products. ■