Eli Lilly CEO Explains The Reasons Behind Not Changing 2015 Guidance On Back Of Strengthening Dollar

John Lechleiter, CEO at Eli Lilly and Co (NYSE: LLY), was recently on CNBC to talk about the products coming off patent and the impact of currency on the company’s top-line.

Patent Expirations 

“It’s been a roller-coaster ride, we lost our U.S. patent on Zyprexa in 2011; We saw up ahead Gemzar our cancer drug, Evista our bone drug and then Cymbalta our neuroscience product,” Lechleiter said. “Evista and Cymbalta both coming off patent essentially last year. So, it's been up and down as you know when you lose a patent in this business the generic entry comes very quickly and you essentially lose all of that revenue overnight.”

He continued, “We saw this coming. We have been investing in R&D, we have been replenishing our pipeline. Last year, four approvals from the FDA, so we are launching new products and we hope this year to begin a new year of growth.”

How Much Did Forex Affect Eli Lilly In The Last Quarter?

“Well with more than half our sales outside the U.S., you can expect that it did hit our top-line in a significant way,” Lechleiter replied. “We revised our guidance for 2015, the line item guidance, we did not change our overall earnings guidance for 2015 -- that remains at $3.10 - $3.20 on a non GAAP basis.”

“The reason is even if our revenues are down from those sales and countries that have weakened currencies versus the dollar, we actually gain a benefit from the cost of our inventories that sit outside the United States. So, our gross margin actually increases and that tends to sort of balance things out. So, we did not change the earnings guidance for this year, but it certainly is hitting our top-line.”