Prozac generics trim Lilly profits

Eli Lilly & Co.'s first-quarter profit fell 22 percent as genericversions of its Prozac antidepressant drug ate into Lilly's marketshare.

Net income fell to $629.2 million, or 58 cents a share, on a 9percent sales drop to $2.6 billion.

Prozac sales collapsed to $186.1 million from $622.9 million asgeneric versions debuted last August when Lilly's patent expired.

At the same time, demand for Lilly's Xigris sepsis treatment, oneof the new products Lilly was counting on to make up for the declinein Prozac, has been slower than expected. Lilly said it expectsearnings to rebound next year as sales of Xigris accelerate and othernew products are introduced.

"Obviously the collapse of Prozac is still hurting them, andXigris sales can be considered a disappointment so far in terms ofexpectations," said Rafael Tamargo, director of equity research atWilmington Trust Co., which owned 207,667 Lilly shares as ofDecember. "They have a good [product] pipeline, but the caveat isthat Xigris has to meet Lilly's projections."

Xigris, introduced in November, had sales of $22 million in thefirst quarter, little more than the $21 million in sales the drug hadat the end of last year. Analysts estimated Xigris will generate morethan $1 billion in annual revenue.

Bloomberg News