Eli Lilly cut its sales and profits forecasts for 2019 on Wednesday, blaming costs related to its acquisition of Loxo Oncology and a hit from the recent trial failure for one of its cancer therapy treatments.
Shares in the $127bn drugmaker dropped nearly 3 per cent in pre-market trading.
Eli agreed to splash out $8bn to buy rival Loxo Oncology last month as part of its plans to expand in the lucrative cancer treatment market.
But as a result of the fees related to the pending acquisition — as well as costs stemming from the setback for its cancer treatment Lartruvo last month — it now expects 2019 adjusted earnings to come in at between $5.55 and $5.65 per share, compared with its prior forecast of $5.90 to $6.00.
Lartruvo was conditionally approved in 2016 to treat a type of rare soft tissue cancer. The trial failure means the drug will no longer be prescribed. This in turn will weigh on full-year sales, with Eli predicting revenue to be between $25.1bn and $25.6bn for 2019, down from the $25.3bn to $25.8bn range it had previously given.
The guidance cut took the shine off what was otherwise a solid set of fourth-quarter results from Eli.
For the three months to the end of December, sales rose 5 per cent to $6.4bn on the back of strong demand for new drugs such as diabetes treatment Trulicity.
The company also swung into a profit of $1.1bn for the quarter, compared to a loss of $1.6bn in the year ago period. Stripping out one-off gains, adjusted earnings was $1.33 per share.
Analysts had expected adjusted earnings of $1.34 per share on sales of $6.2bn.
