(Reuters) - Eli Lilly and Co announced on Tuesday it would take its Elanco animal health business public and posted better-than-expected quarterly profit, helped by demand for its diabetes drugs Trulicity and Humalog.
FILE PHOTO: The logo and ticker for Eli Lilly and Co. are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 18, 2018. REUTERS/Brendan McDermid
Shares of the Indiana-based drugmaker, also helped by a separate launch of an $8 billion share buyback and a higher full-year profit forecast, rose 5.7 percent to $93.90 before the bell.
Lilly also joined major competitors Pfizer Inc, Merck & Co Inc and Novartis AG in keeping drugs prices on hold, effectively freezing them for the rest of the year in response to President Donald Trump’s blueprint aimed at clamping down on escalating costs for patients.
“We remain focused on driving revenue growth through volume, not price,” Chief Executive Officer David Ricks said in a statement, adding that the company’s forecast for 2018 does not assume U.S. price increases for the rest of the year.
Lilly raised its adjusted earnings per share forecast for the full year to $5.40 to $5.50 from $5.10 to $5.20.
In the IPO, the company plans to offer less than 20 percent of Elanco, which brought in a revenue of $792.1 million in the reporting quarter. The unit could have a valuation of several billion dollars.
The company expects to complete the initial public offering in the second half of 2018.
The unit brought in sales of $3.09 billion in 2017 and accounted for about 13.5 percent of Lilly’s total revenue.
The decision to take the unit public follows similar moves by Pfizer Inc and Henry Schein, which have
