Eli Lilly and Co reported a drop in quarterly earnings as generic competition increased for its Gemzar cancer medicine, but sales beat forecasts and the drugmaker boosted its full-year profit view.
Lilly earned $1.2 billion, or $1.07 per share, in its second quarter, down from $1.35 billion, or $1.22 per share, a year earlier.
Excluding items, the Indianapolis-based drugmaker earned $1.18 per share, matching the average forecast of analysts polled by Thomson Reuters I/B/E/S.
Global revenue rose 9 percent to $6.25 billion, but would have risen only 5 percent if not for the weaker dollar, which raises the value of sales in overseas markets. Sales topped Wall Street expectations of $6.03 billion.
The Indianapolis drugmaker said on Thursday it now expected 2011 earnings of $4.25 to $4.35 per share, excluding special items. It had previously said it expected earnings of $4.15 to $4.30 per share.
The new forecast would translate into a profit decline of 8.2 percent to 10.3 percent from last year.
Lilly is girding for one of the worst patent cliffs in the industry, with its $5 billion-a-year Zyprexa schizophrenia drug losing U.S. marketing exclusivity in October.
The pain will worsen in mid-2013 when its Cymbalta anti-depressant, with current annual sales of $3.5 billion, faces generics. Its Evista osteoporosis drug then goes generic in 2014.
Second-quarter sales of Gemzar, which has been battling generics since November, fell 62 percent to $112 million.
Lilly earlier this month pledged to avoid large-scale mergers as its patent lapses mount, saying it would rely instead on its pipeline of experimental drugs to eventually restore earnings growth. It said it would boost research spending through 2014 and maintain its hefty dividend.
(Reporting by Ransdell Pierson; Editing by Lisa Von Ahn and Ted Kerr)