Lilly Earnings: Another $693M Burned in Zyprexa Furnace

Eli Lilly (LLY) spent $692.7 million on costs related to Zyprexa litigation in 2009, according to its Q4 2009 earnings report. The company has burned an average of 6 percent of its revenues since 2006 fighting and settling lawsuits which have alleged the company failed to warn patients of the drug’s weight gain and diabetes side effects. Lilly has spent an astonishing $3.9 billion on litigation resulting from Zyprexa, in total.

This will be regarded as “good” news by Wall Street, because Zyprexa costs are less than half those expended the year before. In 2008, Lilly blew $1.9 billion on the same costs.

Here’s an updated table of what Zyprexa has cost Lilly over the last three years:

Period   charge  % of Revs

• 4q06    945.2         22%
• 1q07    123             3%
• 2q07    0.00            0%
• 3q07    81.3            2%
• 4q07    98.2            2%
• 1q08    145.7          3%
• 2q08    88.9            2%
• 3q08    1,659.40     32%
• 4q08    80.0            2%
• FY09    692.7          3%
• TOTAL 3,914.4   6%

Lilly management will not be losing too much sleep over this news — the drug continues to pay for itself. Its sales rose 19 percent in the fourth quarter to $1.4 billion.

• Related:
• Lilly PowerPoint: “Execute the *%#&! Out of Them”; a Photo Gallery of Dodgy Drug Sales Advice
• Lilly Urged Zyprexa Use Without Proper Diagnosis
• Lilly Plans 5,500 Layoffs as Company Heads Over Zyprexa Patent Cliff
• Lilly’s Zyprexa Costs Reach $3.3B; 6% of Revenues Since ‘06
• Suit: Lilly Touted Zyprexa for Alzheimer’s Knowing It Was Ineffective; Sales Reps Had $10K Off-Label Promo Budgets
• Eli Lilly Promoted Zyprexa for Patients Who Were Badly Dressed