Investopedia: Lilly Will Pay Investors For Patience

By no means is it easy to be a large-cap pharmaceutical company these days. The cost of developing new drugs has skyrocketed, patent expirations have gutted revenue growth and troubles with regulators and advocacy groups have weighed on shares. All of that said, pessimism seems to be at too high a level. Investors may want to consider the virtues of clipping coupons and waiting for companies like Lilly (NYSE:LLY) to come out from under the current cloud. 


Q1 - Okay, But Not Great
Large cap companies often move with the agility of supertankers, so quarter-to-quarter financial changes tend to be slow and modest. Lilly reported 6% revenue growth this time around, with 5% growth in volume and flat pricing. Lilly gets a bit less than half of its revenue from overseas, and this was the growth driver this quarter - foreign sales jumped 13%, while U.S. sales rose just 1%. (For more, see Measuring The Medicine Makers.)

Of total pharmaceutical sales growth of 5%, major drugs like Zyprexa, Cymbalta and Alimta were significant contributors (growing 6%, 13% and 10% respectively). Unfortunately, that also serves to highlight the risk from generic competition that is soon coming for Zyprexa and then coming three years later for Cymbalta. 



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