Eli Lilly and Company announced financial results for the fourth quarter and full year of 2018.
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In the fourth quarter of 2018, worldwide revenue was $6.439 billion, an increase of 5 percent compared with the fourth quarter of 2017.
The increase in revenue was driven by an 11 percent increase due to volume, partially offset by a 5 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 7 percent, to $3.664 billion, driven by increased volume, partially offset by lower realized prices, primarily in the diabetes portfolio. U.S. volume growth of 12 percent was driven by newer pharmaceutical products, including Trulicity, Taltz and Basaglar, partially offset by decreased volume for products that have lost exclusivity, including Cialis and Effient.
Revenue outside the U.S. increased 1 percent, to $2.774 billion, driven by increased volume of 8 percent, which was primarily from newer pharmaceutical products, including Trulicity, Olumiant and Taltz.
The increase in revenue was partially offset by lower realized prices for several pharmaceutical products, the unfavorable impact of foreign exchange rates and decreased volume for Cialis due to loss of exclusivity.
Gross margin increased 7 percent, to $4.845 billion, in the fourth quarter of 2018 compared with the fourth quarter of 2017.
Gross margin as a percent of revenue was 75.2 percent, an increase of 1.9 percentage points compared with the fourth quarter of 2017.
The increase in gross margin percent was primarily due to manufacturing efficiencies and lower amortization expense, partially offset by the negative impact of price on revenue.
For the full year 2018, worldwide revenue increased 7 percent compared with 2017 to $24.556 billion. The increase in revenue was driven by an 8 percent increase due to volume and a 1 percent increase due to the favorable impact of foreign exchange rates, partially offset by a 1 percent decrease due to lower realized prices.
Revenue in the U.S. increased 8 percent to $13.875 billion, driven by increased volume for newer pharmaceutical products, including Trulicity, Basaglar, Taltz, Verzenio and Jardiance.
The increase in revenue was partially offset by decreased volume for products that have lost exclusivity, including Cialis, Effient and Strattera, as well as lower realized prices for several pharmaceutical products, including Trulicity, Basaglar, Forteo and Taltz.
Revenue outside the U.S. increased 6 percent to $10.681 billion, due to increased volume for several newer pharmaceutical products, including Trulicity, Olumiant, and Taltz and, to a lesser extent, the favorable impact of foreign exchange rates.
The increase in revenue was partially offset by lower realized prices for several pharmaceutical products.
Gross margin increased 8 percent to $18.126 billion in 2018 compared with 2017. Gross margin as a percent of revenue was 73.8 percent, an increase of 0.7 percentage points.
The increase in gross margin percent was primarily due to manufacturing efficiencies and lower amortization expenses, offset by the impact of foreign exchange rates on international inventories sold, the timing of manufacturing production and the negative impact of price on revenue.
Total operating expenses decreased 1 percent to $11.939 billion in 2018 compared with 2017. Research and development expenses decreased 1 percent to $5.307 billion, or 21.6 percent of revenue. ■