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Eli Lilly raises full-year earnings guidance; flags plans to float Elanco Animal Health

"Lilly delivered strong results once more in the second quarter in terms of operational performance, pipeline advancements and strategic objectives," said David Ricks, the company's chairman and CEO.
IPO
Eli Illy is planning an IPO for its animal health division

Shares in Eli Lilly and Co (NYSE:LLY) were wanted in pre-market trading after the drugs-maker topped earnings expectations with its second quarter results.

The shares were up more than 5% at US$93.39 in screen-based trading after the group said it expects full-year earnings per share to be in the range of US$5.40 – US$5.50, with both ends of the range being well above the median forecast of US$5.15 from analysts who follow the stock.

READ Eli Lilly 1Q earnings beat Street, but FDA delivers disappointing recommendation for new arthritis drug

Underlying second quarter earnings per share of US$1.50 comfortably beat the consensus forecast of US$1.30.

The company posted a net loss of US$259.9mln, versus a profit of US$1.01bn in the corresponding period of last year but this was after one-off charges including a hefty restructuring charge of US$3bn.

Revenue rose to US$6.36bn, up 9% year-on-year and ahead of the consensus estimate of US$6.05bn.

"The increase in our worldwide revenue was fueled by volume growth of our new medicines, while we also maintained a keen focus on containing costs and improving productivity,” declared David Ricks, the chairman and chief executive officer of Lilly.

“Our pipeline continued to demonstrate our commitment to scientific innovation, highlighted by forward progress for key molecules, several positive late-stage data readouts and the addition of promising new assets through business development,” he added.

In a separate announcement, the company said it would hive off up to 20% of its Elanco Animal Health unit and float it on the stock exchange.

Lilly plans to divest its remaining ownership through a tax-efficient transaction.

"Based on our strategic review, we concluded that after-tax value for Lilly shareholders would be maximized by pursuing an initial public offering of Elanco," Ricks said.

"We believe this will allow Elanco to efficiently deploy its resources to those growth opportunities that best serve its customers. In addition, this will provide Lilly even greater focus on the human pharmaceutical business to pursue our purpose of creating life-changing medicines for patients," he added.

Established in 1954, Elanco provides products and knowledge services to improve animal health and food-animal production in more than 70 countries.

In a separate announcement, the company said it would hive off up to 20% of its Elanco Animal Health unit and float it on the stock exchange.

Lilly plans to divest its remaining ownership through a tax-efficient transaction.

"Based on our strategic review, we concluded that after-tax value for Lilly shareholders would be maximized by pursuing an initial public offering of Elanco," Ricks said.

"We believe this will allow Elanco to efficiently deploy its resources to those growth opportunities that best serve its customers. In addition, this will provide Lilly even greater focus on the human pharmaceutical business to pursue our purpose of creating life-changing medicines for patients," he added.

Established in 1954, Elanco provides products and knowledge services to improve animal health and food-animal production in more than 70 countries.

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