|
Indiana
|
|
35-0470950
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
Title of Each Class
|
Trading Symbol
|
Name of Each Exchange On Which Registered
|
Common Stock (no par value)
|
LLY
|
New York Stock Exchange
|
1.000% Notes due 2022
|
LLY22
|
New York Stock Exchange
|
7 1/8% Notes due 2025
|
LLY25
|
New York Stock Exchange
|
1.625% Notes due 2026
|
LLY26
|
New York Stock Exchange
|
2.125% Notes due 2030
|
LLY30
|
New York Stock Exchange
|
0.625% Notes due 2031
|
LLY31
|
New York Stock Exchange
|
6.77% Notes due 2036
|
LLY36
|
New York Stock Exchange
|
1.700% Notes due 2049
|
LLY49A
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
|
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
|
Smaller reporting company
|
☐
|
||
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
Page
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|
|
|
|
|
|
||
|
|
|
•
|
uncertainties in the pharmaceutical research and development process, including with respect to the timing of anticipated regulatory approvals and launches of new products;
|
•
|
market uptake of recently launched products;
|
•
|
competitive developments affecting current products and our pipeline;
|
•
|
the expiration of intellectual property protection for certain of our products;
|
•
|
our ability to protect and enforce patents and other intellectual property;
|
•
|
the impact of actions of governmental and private payers affecting pricing of, reimbursement for, and access to pharmaceuticals;
|
•
|
regulatory compliance problems or government investigations;
|
•
|
regulatory actions regarding currently marketed products;
|
•
|
unexpected safety or efficacy concerns associated with our products;
|
•
|
issues with product supply stemming from manufacturing difficulties or disruptions;
|
•
|
regulatory changes or other developments;
|
•
|
changes in patent law or regulations related to data-package exclusivity;
|
•
|
litigation, investigations, or other similar proceedings involving past, current, or future products or commercial activities as we are largely self-insured;
|
•
|
unauthorized disclosure, misappropriation, or compromise of trade secrets or other confidential data stored in our information systems, networks, and facilities, or those of third parties with whom we share our data;
|
•
|
changes in tax law, including the impact of United States tax reform legislation enacted in December 2017 and related guidance, or events that differ from our assumptions related to tax positions;
|
•
|
changes in foreign currency exchange rates, interest rates, and inflation;
|
•
|
asset impairments and restructuring charges;
|
•
|
changes in accounting and reporting standards promulgated by the Financial Accounting Standards Board and the Securities and Exchange Commission (SEC);
|
•
|
acquisitions and business development transactions and related integration costs;
|
•
|
information technology system inadequacies or operating failures;
|
•
|
the impact of the evolving COVID-19 pandemic and the global response thereto;
|
•
|
reliance on third-party relationships and outsourcing arrangements; and
|
•
|
the impact of global macroeconomic conditions.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Revenue (Note 2)
|
$
|
5,859.8
|
|
|
$
|
5,092.2
|
|
Costs, expenses, and other:
|
|
|
|
||||
Cost of sales
|
1,215.1
|
|
|
1,138.7
|
|
||
Research and development
|
1,392.1
|
|
|
1,230.5
|
|
||
Marketing, selling, and administrative
|
1,549.6
|
|
|
1,517.1
|
|
||
Acquired in-process research and development (Note 3)
|
52.3
|
|
|
136.9
|
|
||
Asset impairment, restructuring, and other special charges (Note 6)
|
59.9
|
|
|
423.9
|
|
||
Other–net, (income) expense (Note 12)
|
(89.1
|
)
|
|
(86.0
|
)
|
||
|
4,179.9
|
|
|
4,361.1
|
|
||
Income before income taxes
|
1,679.9
|
|
|
731.1
|
|
||
Income taxes (Note 8)
|
223.4
|
|
|
170.0
|
|
||
Net income from continuing operations
|
1,456.5
|
|
|
561.1
|
|
||
Net income from discontinued operations (Note 5)
|
—
|
|
|
3,680.5
|
|
||
Net income
|
$
|
1,456.5
|
|
|
$
|
4,241.6
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Earnings from continuing operations - basic
|
$
|
1.60
|
|
|
$
|
0.57
|
|
Earnings from discontinued operations - basic
|
—
|
|
|
3.76
|
|
||
Earnings per share - basic
|
$
|
1.60
|
|
|
$
|
4.33
|
|
|
|
|
|
||||
Earnings from continuing operations - diluted
|
$
|
1.60
|
|
|
$
|
0.57
|
|
Earnings from discontinued operations - diluted
|
—
|
|
|
3.74
|
|
||
Earnings per share - diluted
|
$
|
1.60
|
|
|
$
|
4.31
|
|
|
|
|
|
||||
Shares used in calculation of earnings per share:
|
|
|
|
||||
Basic
|
908.2
|
|
|
979.9
|
|
||
Diluted
|
911.7
|
|
|
984.0
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
1,456.5
|
|
|
$
|
4,241.6
|
|
Other comprehensive loss from continuing operations, net of tax (Note 11)
|
(362.3
|
)
|
|
(4.1
|
)
|
||
Other comprehensive income from discontinued operations, net of tax (Note 11)
|
—
|
|
|
56.8
|
|
||
Other comprehensive income (loss), net of tax (Note 11)
|
(362.3
|
)
|
|
52.7
|
|
||
Comprehensive income
|
$
|
1,094.2
|
|
|
$
|
4,294.3
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Assets
|
(Unaudited)
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents (Note 7)
|
$
|
1,699.0
|
|
|
$
|
2,337.5
|
|
Short-term investments (Note 7)
|
78.4
|
|
|
101.0
|
|
||
Accounts receivable, net of allowances of $23.7 (2020) and $22.4 (2019)
|
5,106.1
|
|
|
4,547.3
|
|
||
Other receivables
|
1,246.4
|
|
|
994.2
|
|
||
Inventories
|
3,102.4
|
|
|
3,190.7
|
|
||
Prepaid expenses and other
|
2,761.9
|
|
|
2,538.9
|
|
||
Total current assets
|
13,994.2
|
|
|
13,709.6
|
|
||
Investments (Note 7)
|
2,148.7
|
|
|
1,962.4
|
|
||
Goodwill
|
3,779.1
|
|
|
3,679.4
|
|
||
Other intangibles, net
|
7,766.7
|
|
|
6,618.0
|
|
||
Deferred tax assets
|
2,471.6
|
|
|
2,572.6
|
|
||
Property and equipment, net of accumulated depreciation of $9,141.5 (2020) and $9,161.6 (2019)
|
7,897.9
|
|
|
7,872.9
|
|
||
Other noncurrent assets
|
3,044.6
|
|
|
2,871.2
|
|
||
Total assets
|
$
|
41,102.8
|
|
|
$
|
39,286.1
|
|
Liabilities and Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Short-term borrowings and current maturities of long-term debt
|
$
|
3,248.0
|
|
|
$
|
1,499.3
|
|
Accounts payable
|
1,207.7
|
|
|
1,405.3
|
|
||
Employee compensation
|
565.8
|
|
|
915.5
|
|
||
Sales rebates and discounts
|
4,703.9
|
|
|
4,933.6
|
|
||
Dividends payable
|
—
|
|
|
671.5
|
|
||
Income taxes payable
|
667.4
|
|
|
160.6
|
|
||
Other current liabilities
|
2,217.4
|
|
|
2,189.4
|
|
||
Total current liabilities
|
12,610.2
|
|
|
11,775.2
|
|
||
Other Liabilities
|
|
|
|
||||
Long-term debt
|
13,982.3
|
|
|
13,817.9
|
|
||
Accrued retirement benefits (Note 9)
|
3,632.0
|
|
|
3,698.2
|
|
||
Long-term income taxes payable
|
3,621.9
|
|
|
3,607.2
|
|
||
Deferred tax liabilities
|
2,186.2
|
|
|
2,187.5
|
|
||
Other noncurrent liabilities
|
1,873.0
|
|
|
1,501.0
|
|
||
Total other liabilities
|
25,295.4
|
|
|
24,811.8
|
|
||
Commitments and Contingencies (Note 10)
|
|
|
|
||||
Eli Lilly and Company Shareholders’ Equity
|
|
|
|
||||
Common stock
|
598.1
|
|
|
598.8
|
|
||
Additional paid-in capital
|
6,556.1
|
|
|
6,685.3
|
|
||
Retained earnings
|
5,879.4
|
|
|
4,920.4
|
|
||
Employee benefit trust
|
(3,013.2
|
)
|
|
(3,013.2
|
)
|
||
Accumulated other comprehensive loss (Note 11)
|
(6,885.9
|
)
|
|
(6,523.6
|
)
|
||
Cost of common stock in treasury
|
(55.7
|
)
|
|
(60.8
|
)
|
||
Total Eli Lilly and Company shareholders’ equity
|
3,078.8
|
|
|
2,606.9
|
|
||
Noncontrolling interests
|
118.4
|
|
|
92.2
|
|
||
Total equity
|
3,197.2
|
|
|
2,699.1
|
|
||
Total liabilities and equity
|
$
|
41,102.8
|
|
|
$
|
39,286.1
|
|
|
Equity of Eli Lilly and Company Shareholders
|
|
|
||||||||||||||||||||||||||||||
(Dollars in millions and shares in thousands)
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Employee Benefit Trust
|
|
Accumulated Other Comprehensive Loss
|
|
Common Stock in Treasury
|
|
Noncontrolling Interests
|
||||||||||||||||||||
Shares
|
|
Amount
|
Shares
|
|
Amount
|
||||||||||||||||||||||||||||
Balance at January 1, 2019
|
1,057,639
|
|
|
$
|
661.0
|
|
|
$
|
6,583.6
|
|
|
$
|
11,395.9
|
|
|
$
|
(3,013.2
|
)
|
|
$
|
(5,729.2
|
)
|
|
604
|
|
|
$
|
(69.4
|
)
|
|
$
|
1,080.4
|
|
Net income
|
|
|
|
|
|
|
|
|
|
4,241.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.2
|
|
|||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41.7
|
|
|
|
|
|
|
|
|
11.0
|
|
|||||||
Retirement of treasury shares
|
(89,197
|
)
|
|
(55.7
|
)
|
|
|
|
|
(10,771.8
|
)
|
|
|
|
|
|
|
|
(89,197
|
)
|
|
10,827.5
|
|
|
|
|
|||||||
Purchase of treasury shares
|
|
|
|
|
|
|
(700.0
|
)
|
|
|
|
|
|
|
|
|
|
|
24,196
|
|
|
(2,800.0
|
)
|
|
|
|
|||||||
Issuance of stock under employee stock plans, net
|
2,921
|
|
|
1.8
|
|
|
(202.8
|
)
|
|
|
|
|
|
|
|
|
|
|
(63
|
)
|
|
7.3
|
|
|
|
|
|||||||
Stock-based compensation
|
|
|
|
|
|
|
75.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Acquisition of common stock in exchange offer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,001
|
|
|
(8,027.5
|
)
|
|
|
|
|||||||
Deconsolidation of Elanco
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,028.9
|
)
|
|||||||
Other
|
|
|
|
|
|
|
|
|
|
13.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at March 31, 2019
|
971,363
|
|
|
$
|
607.1
|
|
|
$
|
5,756.6
|
|
|
$
|
4,879.4
|
|
|
$
|
(3,013.2
|
)
|
|
$
|
(5,687.5
|
)
|
|
541
|
|
|
$
|
(62.1
|
)
|
|
$
|
84.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at January 1, 2020
|
958,056
|
|
|
$
|
598.8
|
|
|
$
|
6,685.3
|
|
|
$
|
4,920.4
|
|
|
$
|
(3,013.2
|
)
|
|
$
|
(6,523.6
|
)
|
|
530
|
|
|
$
|
(60.8
|
)
|
|
$
|
92.2
|
|
Net income
|
|
|
|
|
|
|
|
|
|
1,456.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26.2
|
|
|||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(362.3
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Retirement of treasury shares
|
(3,627
|
)
|
|
(2.3
|
)
|
|
|
|
|
(497.7
|
)
|
|
|
|
|
|
|
|
(3,627
|
)
|
|
500.0
|
|
|
|
|
|||||||
Purchase of treasury shares (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,627
|
|
|
(500.0
|
)
|
|
|
|
|||||||
Issuance of stock under employee stock plans, net
|
2,500
|
|
|
1.6
|
|
|
(201.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(43
|
)
|
|
5.1
|
|
|
|
|
|||||||
Stock-based compensation
|
|
|
|
|
|
|
71.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at March 31, 2020
|
956,929
|
|
|
$
|
598.1
|
|
|
$
|
6,556.1
|
|
|
$
|
5,879.4
|
|
|
$
|
(3,013.2
|
)
|
|
$
|
(6,885.9
|
)
|
|
487
|
|
|
$
|
(55.7
|
)
|
|
$
|
118.4
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Cash Flows from Operating Activities
|
|
||||||
Net income
|
$
|
1,456.5
|
|
|
$
|
4,241.6
|
|
Adjustments to Reconcile Net Income to Cash Flows from Operating Activities:
|
|
|
|
||||
Gain related to disposition of Elanco (Note 5)
|
—
|
|
|
(3,680.5
|
)
|
||
Depreciation and amortization
|
273.6
|
|
|
356.5
|
|
||
Change in deferred income taxes
|
11.2
|
|
|
(72.4
|
)
|
||
Stock-based compensation expense
|
71.8
|
|
|
75.8
|
|
||
Acquired in-process research and development (Note 3)
|
52.3
|
|
|
136.9
|
|
||
Other changes in operating assets and liabilities, net of acquisitions and divestitures
|
(1,408.1
|
)
|
|
(714.3
|
)
|
||
Other non-cash operating activities, net
|
(74.9
|
)
|
|
(32.3
|
)
|
||
Net Cash Provided by Operating Activities
|
382.4
|
|
|
311.3
|
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Net purchases of property and equipment
|
(258.3
|
)
|
|
(203.7
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
36.8
|
|
|
35.9
|
|
||
Purchases of short-term investments
|
—
|
|
|
(33.7
|
)
|
||
Proceeds from sales of noncurrent investments
|
54.5
|
|
|
83.6
|
|
||
Purchases of noncurrent investments
|
(83.0
|
)
|
|
(60.6
|
)
|
||
Cash paid for acquisitions, net of cash acquired (Note 3)
|
(849.3
|
)
|
|
(6,917.7
|
)
|
||
Purchases of in-process research and development
|
(13.0
|
)
|
|
(196.9
|
)
|
||
Other investing activities, net
|
51.4
|
|
|
(385.6
|
)
|
||
Net Cash Used for Investing Activities
|
(1,060.9
|
)
|
|
(7,678.7
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Dividends paid
|
(671.3
|
)
|
|
(637.2
|
)
|
||
Net change in short-term borrowings
|
1,748.7
|
|
|
1,850.4
|
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
4,448.3
|
|
||
Repayments of long-term debt
|
(276.3
|
)
|
|
(600.0
|
)
|
||
Purchases of common stock
|
(500.0
|
)
|
|
(3,500.0
|
)
|
||
Other financing activities, net
|
(194.4
|
)
|
|
(193.7
|
)
|
||
Net Cash Provided by Financing Activities
|
106.7
|
|
|
1,367.8
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(66.7
|
)
|
|
37.8
|
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(638.5
|
)
|
|
(5,961.8
|
)
|
||
Cash and cash equivalents at January 1 (2019 includes $677.5 of discontinued operations)
|
2,337.5
|
|
|
7,998.2
|
|
||
Cash and Cash Equivalents at March 31
|
$
|
1,699.0
|
|
|
$
|
2,036.4
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net product revenue
|
$
|
5,403.5
|
|
|
$
|
4,692.3
|
|
Collaboration and other revenue (1)
|
456.3
|
|
|
399.9
|
|
||
Revenue
|
$
|
5,859.8
|
|
|
$
|
5,092.2
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Contract liabilities
|
$
|
307.8
|
|
|
$
|
264.6
|
|
|
Three Months Ended
March 31, |
||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||
|
United States (U.S.) (1)
|
Outside U.S.
|
Total
|
|
U.S. (1)
|
Outside U.S.
|
Total
|
||||||||||||
Revenue—to unaffiliated customers:
|
|
|
|
|
|
|
|
||||||||||||
Diabetes:
|
|
|
|
|
|
|
|
||||||||||||
Trulicity®
|
$
|
929.5
|
|
$
|
299.9
|
|
$
|
1,229.4
|
|
|
$
|
665.6
|
|
$
|
214.1
|
|
$
|
879.7
|
|
Humalog® (2)
|
398.6
|
|
297.2
|
|
695.8
|
|
|
448.6
|
|
282.2
|
|
730.8
|
|
||||||
Humulin®
|
214.1
|
|
101.5
|
|
315.7
|
|
|
201.3
|
|
96.4
|
|
297.7
|
|
||||||
Basaglar®
|
230.4
|
|
73.3
|
|
303.7
|
|
|
198.2
|
|
53.2
|
|
251.4
|
|
||||||
Jardiance (3)
|
144.6
|
|
122.9
|
|
267.5
|
|
|
125.2
|
|
78.4
|
|
203.6
|
|
||||||
Trajenta (4)
|
28.7
|
|
64.5
|
|
93.2
|
|
|
47.4
|
|
84.6
|
|
131.9
|
|
||||||
Other Diabetes
|
45.3
|
|
18.4
|
|
63.6
|
|
|
33.1
|
|
24.7
|
|
57.9
|
|
||||||
Total Diabetes
|
1,991.2
|
|
977.7
|
|
2,968.9
|
|
|
1,719.4
|
|
833.6
|
|
2,553.0
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Oncology:
|
|
|
|
|
|
|
|
||||||||||||
Alimta®
|
324.2
|
|
235.8
|
|
560.1
|
|
|
281.8
|
|
217.4
|
|
499.2
|
|
||||||
Cyramza®
|
89.1
|
|
149.9
|
|
239.0
|
|
|
75.1
|
|
123.2
|
|
198.3
|
|
||||||
Verzenio®
|
129.4
|
|
58.6
|
|
188.0
|
|
|
93.5
|
|
15.9
|
|
109.4
|
|
||||||
Erbitux®
|
117.8
|
|
13.0
|
|
130.8
|
|
|
113.3
|
|
5.1
|
|
118.4
|
|
||||||
Other Oncology
|
(2.6
|
)
|
86.3
|
|
83.6
|
|
|
30.2
|
|
57.3
|
|
87.4
|
|
||||||
Total Oncology
|
657.9
|
|
543.6
|
|
1,201.5
|
|
|
593.9
|
|
418.9
|
|
1,012.7
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Immunology:
|
|
|
|
|
|
|
|
||||||||||||
Taltz®
|
327.5
|
|
116.0
|
|
443.5
|
|
|
180.8
|
|
71.7
|
|
252.5
|
|
||||||
Olumiant®
|
11.3
|
|
128.4
|
|
139.7
|
|
|
6.4
|
|
75.7
|
|
82.1
|
|
||||||
Other Immunology
|
2.6
|
|
—
|
|
2.6
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Total Immunology
|
341.4
|
|
244.4
|
|
585.8
|
|
|
187.2
|
|
147.4
|
|
334.7
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Neuroscience:
|
|
|
|
|
|
|
|
||||||||||||
Cymbalta®
|
11.6
|
|
198.8
|
|
210.4
|
|
|
10.3
|
|
153.8
|
|
164.1
|
|
||||||
Zyprexa®
|
11.2
|
|
87.2
|
|
98.4
|
|
|
9.3
|
|
97.9
|
|
107.2
|
|
||||||
Emgality®
|
67.3
|
|
6.7
|
|
74.0
|
|
|
12.2
|
|
2.1
|
|
14.2
|
|
||||||
Other Neuroscience
|
20.2
|
|
60.5
|
|
80.7
|
|
|
19.3
|
|
88.2
|
|
107.6
|
|
||||||
Total Neuroscience
|
110.3
|
|
353.2
|
|
463.5
|
|
|
51.1
|
|
342.0
|
|
393.1
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Other:
|
|
|
|
|
|
|
|
||||||||||||
Forteo®
|
122.5
|
|
149.8
|
|
272.4
|
|
|
125.9
|
|
187.0
|
|
312.9
|
|
||||||
Cialis®
|
26.1
|
|
167.0
|
|
193.0
|
|
|
143.2
|
|
164.9
|
|
308.2
|
|
||||||
Other
|
79.4
|
|
95.3
|
|
174.7
|
|
|
70.1
|
|
107.6
|
|
177.6
|
|
||||||
Total Other
|
228.0
|
|
412.1
|
|
640.1
|
|
|
339.2
|
|
459.5
|
|
798.7
|
|
||||||
Revenue
|
$
|
3,328.8
|
|
$
|
2,531.0
|
|
$
|
5,859.8
|
|
|
$
|
2,890.8
|
|
$
|
2,201.4
|
|
$
|
5,092.2
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Revenue—to unaffiliated customers (1):
|
|
|
|
||||
U.S. (2)
|
$
|
3,328.8
|
|
|
$
|
2,890.8
|
|
Europe
|
1,061.0
|
|
|
900.3
|
|
||
Japan
|
592.3
|
|
|
543.7
|
|
||
China
|
267.3
|
|
|
211.2
|
|
||
Other foreign countries
|
610.4
|
|
|
546.2
|
|
||
Revenue
|
$
|
5,859.8
|
|
|
$
|
5,092.2
|
|
Estimated Fair Value at February 15, 2019
|
|||
Acquired IPR&D (1)
|
$
|
4,670.0
|
|
Finite-lived intangibles (2)
|
980.0
|
|
|
Deferred income taxes
|
(1,032.8
|
)
|
|
Other assets and liabilities - net
|
(26.4
|
)
|
|
Total identifiable net assets
|
4,590.8
|
|
|
Goodwill(3)
|
2,326.9
|
|
|
Total consideration transferred - net of cash acquired
|
$
|
6,917.7
|
|
Counterparty
|
Compound(s) or Therapy
|
Acquisition Month
|
|
Phase of Development (1)
|
|
Acquired IPR&D Expense
|
||
Sitryx Therapeutics Limited
|
Preclinical targets that could lead to potential new medicines for autoimmune diseases
|
March 2020
|
|
Pre-clinical
|
|
$
|
52.3
|
|
|
|
|
|
|
|
|
||
AC Immune SA (2)
|
Tau aggregation inhibitor small molecules for the potential treatment of Alzheimer's disease and other neurodegenerative diseases
|
January 2019
|
|
Pre-clinical
|
|
$
|
96.9
|
|
ImmuNext, Inc.
|
Novel immunometabolism target
|
March 2019
|
|
Pre-clinical
|
|
40.0
|
|
Product Family
|
|
Milestones
(Deferred) Capitalized (1)
|
||
Trajenta (2)
|
|
$
|
446.4
|
|
Jardiance (3)
|
|
289.0
|
|
|
Basaglar
|
|
(250.0
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Basaglar
|
$
|
303.7
|
|
|
$
|
251.4
|
|
Jardiance
|
267.5
|
|
|
203.6
|
|
||
Trajenta
|
93.2
|
|
|
131.9
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Olumiant
|
$
|
139.7
|
|
|
$
|
82.1
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Severance
|
$
|
9.8
|
|
|
$
|
(3.6
|
)
|
Asset impairment and other special charges
|
50.1
|
|
|
427.5
|
|
||
Total asset impairment, restructuring, and other special charges
|
$
|
59.9
|
|
|
$
|
423.9
|
|
•
|
Investments in companies over which we have significant influence but not a controlling interest are accounted for using the equity method, with our share of earnings or losses reported in other-net, (income) expense.
|
•
|
For equity investments that do not have readily determinable fair values, we measure these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Any change in recorded value is recorded in other-net, (income) expense.
|
•
|
Our public equity investments are measured and carried at fair value. Any change in fair value is recognized in other-net, (income) expense.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Fair value hedges:
|
|
|
|
||||
Effect from hedged fixed-rate debt
|
$
|
117.3
|
|
|
$
|
39.3
|
|
Effect from interest rate contracts
|
(117.3
|
)
|
|
(39.3
|
)
|
||
Cash flow hedges:
|
|
|
|
||||
Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss
|
4.0
|
|
|
3.8
|
|
||
Cross-currency interest rate swaps
|
(12.9
|
)
|
|
(28.3
|
)
|
||
Net (gains) losses on foreign currency exchange contracts not designated as hedging instruments
|
(5.7
|
)
|
|
48.9
|
|
||
Total
|
$
|
(14.6
|
)
|
|
$
|
24.4
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net investment hedges:
|
|
|
|
||||
Foreign currency-denominated notes
|
$
|
67.4
|
|
|
$
|
53.7
|
|
Cross-currency interest rate swaps
|
115.8
|
|
|
38.3
|
|
||
Cash flow hedges:
|
|
|
|
||||
Forward-starting interest rate swaps
|
(369.8
|
)
|
|
(11.7
|
)
|
||
Cross-currency interest rate swaps
|
(69.8
|
)
|
|
(30.0
|
)
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||||||
|
Carrying
Amount
|
|
Cost (1)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair
Value
|
||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash equivalents
|
$
|
417.1
|
|
|
$
|
417.1
|
|
|
$
|
417.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
417.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and agency securities
|
$
|
9.3
|
|
|
$
|
9.2
|
|
|
$
|
9.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.3
|
|
Corporate debt securities
|
61.2
|
|
|
62.7
|
|
|
—
|
|
|
61.2
|
|
|
|
|
61.2
|
|
|||||||
Asset-backed securities
|
2.5
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
||||||
Other securities
|
5.4
|
|
|
5.4
|
|
|
—
|
|
|
|
|
|
5.4
|
|
|
5.4
|
|
||||||
Short-term investments
|
$
|
78.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncurrent investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and agency securities
|
$
|
81.2
|
|
|
$
|
77.4
|
|
|
$
|
81.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81.2
|
|
Corporate debt securities
|
230.6
|
|
|
241.0
|
|
|
—
|
|
|
230.6
|
|
|
—
|
|
|
230.6
|
|
||||||
Mortgage-backed securities
|
102.5
|
|
|
99.3
|
|
|
—
|
|
|
102.5
|
|
|
—
|
|
|
102.5
|
|
||||||
Asset-backed securities
|
30.1
|
|
|
30.1
|
|
|
—
|
|
|
30.1
|
|
|
—
|
|
|
30.1
|
|
||||||
Other securities
|
60.0
|
|
|
27.4
|
|
|
—
|
|
|
—
|
|
|
60.2
|
|
|
60.2
|
|
||||||
Marketable equity securities
|
869.5
|
|
|
250.1
|
|
|
869.5
|
|
|
—
|
|
|
—
|
|
|
869.5
|
|
||||||
Equity investments without readily determinable fair values (2)
|
426.3
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity method investments (2)
|
348.5
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noncurrent investments
|
$
|
2,148.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash equivalents
|
$
|
1,025.4
|
|
|
$
|
1,025.4
|
|
|
$
|
1,025.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,025.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and agency securities
|
$
|
7.2
|
|
|
$
|
7.2
|
|
|
$
|
7.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.2
|
|
Corporate debt securities
|
81.4
|
|
|
81.1
|
|
|
—
|
|
|
81.4
|
|
|
—
|
|
|
81.4
|
|
||||||
Asset-backed securities
|
2.6
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
||||||
Other securities
|
9.8
|
|
|
9.8
|
|
|
—
|
|
|
|
|
|
9.8
|
|
|
9.8
|
|
||||||
Short-term investments
|
$
|
101.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncurrent investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and agency securities
|
$
|
77.2
|
|
|
$
|
76.3
|
|
|
$
|
77.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77.2
|
|
Corporate debt securities
|
271.1
|
|
|
267.8
|
|
|
—
|
|
|
271.1
|
|
|
—
|
|
|
271.1
|
|
||||||
Mortgage-backed securities
|
101.1
|
|
|
99.6
|
|
|
—
|
|
|
101.1
|
|
|
—
|
|
|
101.1
|
|
||||||
Asset-backed securities
|
30.0
|
|
|
29.6
|
|
|
—
|
|
|
30.0
|
|
|
—
|
|
|
30.0
|
|
||||||
Other securities
|
60.0
|
|
|
27.4
|
|
|
—
|
|
|
—
|
|
|
60.0
|
|
|
60.0
|
|
||||||
Marketable equity securities
|
718.6
|
|
|
254.4
|
|
|
718.6
|
|
|
—
|
|
|
—
|
|
|
718.6
|
|
||||||
Equity investments without readily determinable fair values (2)
|
405.0
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity method investments (2)
|
299.4
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noncurrent investments
|
$
|
1,962.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||||
|
Carrying
Amount
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair
Value
|
||||||||||
Short-term commercial paper borrowings
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2020
|
$
|
(3,243.1
|
)
|
|
$
|
—
|
|
|
$
|
(3,239.0
|
)
|
|
$
|
—
|
|
|
$
|
(3,239.0
|
)
|
December 31, 2019
|
(1,494.2
|
)
|
|
—
|
|
|
(1,491.6
|
)
|
|
—
|
|
|
(1,491.6
|
)
|
|||||
Long-term debt, including current portion
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2020
|
$
|
(13,987.2
|
)
|
|
$
|
—
|
|
|
$
|
(15,119.0
|
)
|
|
$
|
—
|
|
|
$
|
(15,119.0
|
)
|
December 31, 2019
|
(13,823.0
|
)
|
|
—
|
|
|
(15,150.0
|
)
|
|
—
|
|
|
(15,150.0
|
)
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||||
|
Carrying
Amount
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair
Value
|
||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
||||||||||
Risk-management instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate contracts designated as fair value hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other noncurrent assets
|
$
|
189.3
|
|
|
$
|
—
|
|
|
$
|
189.3
|
|
|
$
|
—
|
|
|
$
|
189.3
|
|
Interest rate contracts designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other noncurrent assets
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||||
Other noncurrent liabilities
|
(327.0
|
)
|
|
—
|
|
|
(327.0
|
)
|
|
—
|
|
|
(327.0
|
)
|
|||||
Cross-currency interest rate contracts designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other receivables
|
18.0
|
|
|
—
|
|
|
18.0
|
|
|
—
|
|
|
18.0
|
|
|||||
Other noncurrent assets
|
116.1
|
|
|
—
|
|
|
116.1
|
|
|
—
|
|
|
116.1
|
|
|||||
Other current liabilities
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||||
Cross-currency interest rate contracts designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other noncurrent liabilities
|
(74.1
|
)
|
|
—
|
|
|
(74.1
|
)
|
|
—
|
|
|
(74.1
|
)
|
|||||
Foreign exchange contracts not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other receivables
|
14.5
|
|
|
—
|
|
|
14.5
|
|
|
—
|
|
|
14.5
|
|
|||||
Other current liabilities
|
(24.6
|
)
|
|
—
|
|
|
(24.6
|
)
|
|
—
|
|
|
(24.6
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Risk-management instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate contracts designated as fair value hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other noncurrent assets
|
72.0
|
|
|
—
|
|
|
72.0
|
|
|
—
|
|
|
72.0
|
|
|||||
Interest rate contracts designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other noncurrent assets
|
43.3
|
|
|
—
|
|
|
43.3
|
|
|
—
|
|
|
43.3
|
|
|||||
Cross-currency interest rate contracts designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other noncurrent assets
|
45.1
|
|
|
—
|
|
|
45.1
|
|
|
—
|
|
|
45.1
|
|
|||||
Other current liabilities
|
(21.4
|
)
|
|
—
|
|
|
(21.4
|
)
|
|
—
|
|
|
(21.4
|
)
|
|||||
Other noncurrent liabilities
|
(5.7
|
)
|
|
—
|
|
|
(5.7
|
)
|
|
—
|
|
|
(5.7
|
)
|
|||||
Cross-currency interest rate contracts designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other noncurrent assets
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|||||
Other noncurrent liabilities
|
(20.1
|
)
|
|
—
|
|
|
(20.1
|
)
|
|
—
|
|
|
(20.1
|
)
|
|||||
Foreign exchange contracts not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other receivables
|
18.4
|
|
|
—
|
|
|
18.4
|
|
|
—
|
|
|
18.4
|
|
|||||
Other current liabilities
|
(11.9
|
)
|
|
—
|
|
|
(11.9
|
)
|
|
—
|
|
|
(11.9
|
)
|
|
Maturities by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
1-5
Years
|
|
6-10
Years
|
|
More Than
10 Years
|
||||||||||
Fair value of debt securities
|
$
|
517.8
|
|
|
$
|
73.3
|
|
|
$
|
240.3
|
|
|
$
|
77.0
|
|
|
$
|
127.2
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Unrealized gross gains
|
$
|
11.2
|
|
|
$
|
10.3
|
|
Unrealized gross losses
|
3.7
|
|
|
4.0
|
|
||
Fair value of securities in an unrealized gain position
|
297.7
|
|
|
426.5
|
|
||
Fair value of securities in an unrealized loss position
|
63.8
|
|
|
141.1
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Proceeds from sales
|
$
|
63.3
|
|
|
$
|
93.7
|
|
Realized gross gains on sales
|
11.6
|
|
|
2.5
|
|
||
Realized gross losses on sales
|
0.8
|
|
|
0.4
|
|
|
Defined Benefit Pension Plans
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Components of net periodic benefit cost:
|
|
|
|
||||
Service cost
|
$
|
78.7
|
|
|
$
|
61.8
|
|
Interest cost
|
105.0
|
|
|
120.7
|
|
||
Expected return on plan assets
|
(221.2
|
)
|
|
(211.1
|
)
|
||
Amortization of prior service cost
|
1.1
|
|
|
1.5
|
|
||
Recognized actuarial loss
|
111.0
|
|
|
69.6
|
|
||
Net periodic benefit cost
|
$
|
74.6
|
|
|
$
|
42.5
|
|
|
Retiree Health Benefit Plans
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Components of net periodic benefit income:
|
|
|
|
||||
Service cost
|
$
|
9.8
|
|
|
$
|
8.8
|
|
Interest cost
|
11.0
|
|
|
14.6
|
|
||
Expected return on plan assets
|
(37.4
|
)
|
|
(36.0
|
)
|
||
Amortization of prior service benefit
|
(14.9
|
)
|
|
(15.7
|
)
|
||
Recognized actuarial loss
|
0.8
|
|
|
0.5
|
|
||
Net periodic benefit income
|
$
|
(30.7
|
)
|
|
$
|
(27.8
|
)
|
|
Continuing Operations
|
|
|
|
|
||||||||||||||||||
(Amounts presented net of taxes)
|
Foreign Currency Translation Gains (Losses)
|
|
Unrealized Net Gains (Losses) on Securities
|
|
Defined Benefit Pension and Retiree Health Benefit Plans
|
|
Effective Portion of Cash Flow Hedges
|
|
Discontinued Operations
|
|
Accumulated Other Comprehensive Loss
|
||||||||||||
Balance at January 1, 2020
|
$
|
(1,678.0
|
)
|
|
$
|
4.9
|
|
|
$
|
(4,638.6
|
)
|
|
$
|
(211.9
|
)
|
|
$
|
—
|
|
|
$
|
(6,523.6
|
)
|
Other comprehensive income (loss) before reclassifications
|
(126.5
|
)
|
|
1.0
|
|
|
30.9
|
|
|
(348.2
|
)
|
|
—
|
|
|
(442.8
|
)
|
||||||
Net amount reclassified from accumulated other comprehensive loss
|
—
|
|
|
(0.1
|
)
|
|
77.4
|
|
|
3.2
|
|
|
—
|
|
|
80.5
|
|
||||||
Net other comprehensive income (loss)
|
(126.5
|
)
|
|
0.9
|
|
|
108.3
|
|
|
(345.0
|
)
|
|
—
|
|
|
(362.3
|
)
|
||||||
Balance at March 31, 2020
|
$
|
(1,804.5
|
)
|
|
$
|
5.8
|
|
|
$
|
(4,530.3
|
)
|
|
$
|
(556.9
|
)
|
|
$
|
—
|
|
|
$
|
(6,885.9
|
)
|
|
Continuing Operations
|
|
|
|
|
||||||||||||||||||
(Amounts presented net of taxes)
|
Foreign Currency Translation Gains (Losses)
|
|
Unrealized Net Gains (Losses) on Securities
|
|
Defined Benefit Pension and Retiree Health Benefit Plans
|
|
Effective Portion of Cash Flow Hedges
|
|
Discontinued Operations
|
|
Accumulated Other Comprehensive Loss
|
||||||||||||
Balance at January 1, 2019 (1)
|
$
|
(1,569.7
|
)
|
|
$
|
(22.1
|
)
|
|
$
|
(3,852.7
|
)
|
|
$
|
(238.9
|
)
|
|
$
|
(56.8
|
)
|
|
$
|
(5,740.2
|
)
|
Other comprehensive income (loss) before reclassifications
|
(31.7
|
)
|
|
16.8
|
|
|
(5.7
|
)
|
|
(32.9
|
)
|
|
(27.2
|
)
|
|
(80.7
|
)
|
||||||
Net amount reclassified from accumulated other comprehensive loss
|
—
|
|
|
1.7
|
|
|
44.7
|
|
|
3.0
|
|
|
84.0
|
|
|
133.4
|
|
||||||
Net other comprehensive income (loss)
|
(31.7
|
)
|
|
18.5
|
|
|
39.0
|
|
|
(29.9
|
)
|
|
56.8
|
|
|
52.7
|
|
||||||
Balance at March 31, 2019
|
$
|
(1,601.4
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(3,813.7
|
)
|
|
$
|
(268.8
|
)
|
|
$
|
—
|
|
|
$
|
(5,687.5
|
)
|
|
Three Months Ended
March 31, |
||||||
Tax benefit (expense)
|
2020
|
|
2019
|
||||
Foreign currency translation gains/losses
|
$
|
(38.5
|
)
|
|
$
|
(19.3
|
)
|
Unrealized net gains/losses on securities
|
(0.3
|
)
|
|
(4.8
|
)
|
||
Defined benefit pension and retiree health benefit plans
|
(25.7
|
)
|
|
(11.4
|
)
|
||
Effective portion of cash flow hedges
|
91.7
|
|
|
8.0
|
|
||
Benefit/(provision) for income taxes allocated to other comprehensive income (loss) items
|
$
|
27.2
|
|
|
$
|
(27.5
|
)
|
Details about Accumulated Other Comprehensive Loss Components
|
|
Three Months Ended
March 31, |
Affected Line Item in the Consolidated Condensed Statements of Operations
|
|||||||
|
2020
|
|
2019
|
|||||||
Amortization of retirement benefit items:
|
|
|
|
|
|
|||||
Prior service benefits, net
|
|
$
|
(13.8
|
)
|
|
$
|
(14.2
|
)
|
Other–net, (income) expense
|
|
Actuarial losses, net
|
|
111.8
|
|
|
70.1
|
|
Other–net, (income) expense
|
|||
Total before tax
|
|
98.0
|
|
|
55.9
|
|
|
|||
Tax benefit
|
|
(20.6
|
)
|
|
(11.2
|
)
|
Income taxes
|
|||
Net of tax
|
|
77.4
|
|
|
44.7
|
|
|
|||
|
|
|
|
|
|
|||||
Other, net of tax
|
|
3.1
|
|
|
4.7
|
|
Other–net, (income) expense
|
|||
Reclassifications from continuing operations (net of tax)
|
|
80.5
|
|
|
49.4
|
|
|
|||
Reclassifications from discontinued operations (net of tax)
|
|
—
|
|
|
84.0
|
|
Net income from discontinued operations
|
|||
Total reclassifications for the period (net of tax)
|
|
$
|
80.5
|
|
|
$
|
133.4
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Interest expense
|
$
|
92.5
|
|
|
$
|
86.5
|
|
Interest income
|
(14.3
|
)
|
|
(30.6
|
)
|
||
Retirement benefit plans
|
(44.6
|
)
|
|
(55.9
|
)
|
||
Other income
|
(122.7
|
)
|
|
(86.0
|
)
|
||
Other–net, (income) expense
|
$
|
(89.1
|
)
|
|
$
|
(86.0
|
)
|
|
Three Months Ended
March 31, |
|
|
||||||
|
2020
|
|
2019
|
|
Percent Change
|
||||
Revenue
|
$
|
5,859.8
|
|
|
$
|
5,092.2
|
|
|
15
|
Gross margin
|
4,644.7
|
|
|
3,953.5
|
|
|
17
|
||
Gross margin as a percent of revenue
|
79.3
|
%
|
|
77.6
|
%
|
|
|
||
Operating expenses
|
$
|
2,941.7
|
|
|
$
|
2,747.6
|
|
|
7
|
Acquired in-process research and development (IPR&D)
|
52.3
|
|
|
136.9
|
|
|
(62)
|
||
Asset impairment, restructuring, and other special charges
|
59.9
|
|
|
423.9
|
|
|
(86)
|
||
Net income from continuing operations
|
1,456.5
|
|
|
561.1
|
|
|
NM
|
||
Net income
|
1,456.5
|
|
|
4,241.6
|
|
|
(66)
|
||
EPS from continuing operations
|
1.60
|
|
|
0.57
|
|
|
NM
|
||
EPS
|
1.60
|
|
|
4.31
|
|
|
(63)
|
•
|
We recognized acquired IPR&D charges of $52.3 million related to the collaboration with Sitryx Therapeutics Limited (Sitryx).
|
•
|
We recognized charges of $59.9 million primarily related to acquisition and integration costs as part of the closing of the acquisition of Dermira, Inc. (Dermira).
|
•
|
We recognized acquired IPR&D charges of $136.9 million related to collaborations with AC Immune SA (AC Immune) and ImmuNext, Inc. (ImmuNext).
|
•
|
We recognized charges of $423.9 million primarily associated with the accelerated vesting of Loxo Oncology, Inc. (Loxo) employee equity awards as a result of the closing of the acquisition of Loxo.
|
•
|
We recognized a gain related to the disposition of Elanco of approximately $3.7 billion.
|
*
|
Biologic molecule subject to the U.S. Biologics Price Competition and Innovation Act
|
**
|
Diagnostic agent
|
Compound
|
Indication
|
U.S.
|
Europe
|
Japan
|
Developments
|
Endocrinology
|
|||||
Baqsimi
|
Severe hypoglycemia
|
Launched
|
Approved
|
Approved in Japan in the first quarter of 2020.
|
|
Tirzepatide
|
Type 2 diabetes
|
Phase III
|
Phase III trials are ongoing.
|
||
Obesity
|
Phase III
|
Phase III trials are ongoing.
|
|||
Lyumjev
|
Type 1 and 2 diabetes
|
Submitted
|
Approved
|
Approved in Europe and Japan in the first quarter of 2020.
|
|
Immunology
|
|||||
Lebrikizumab
|
Atopic dermatitis
|
Phase III
|
Acquired in the Dermira acquisition in February 2020. Granted Fast Track Designation(1) by the U.S. Food and Drug Administration (FDA). Phase III trials are ongoing.
|
||
Mirikizumab
|
Crohn's Disease
|
Phase III
|
Phase III trials are ongoing.
|
||
Psoriasis
|
Phase III
|
In April 2020, announced a Phase III trial met the co-primary and key secondary endpoints. Another Phase III trial is ongoing.
|
|||
Ulcerative colitis
|
Phase III
|
Phase III trials are ongoing.
|
Compound
|
Indication
|
U.S.
|
Europe
|
Japan
|
Developments
|
Neuroscience
|
|||||
Emgality
|
Cluster headache
|
Launched
|
Submitted
|
Not pursuing Phase III trial
|
Received negative opinion from the Committee for Medicinal Products for Human Use in Europe during the first quarter of 2020.
|
Migraine prevention
|
Launched
|
Submitted
|
Submitted to Japanese regulatory authorities in the first quarter of 2020.
|
||
Flortaucipir
|
Alzheimer's disease diagnostic
|
Submitted
|
Not pursuing Phase III trials
|
Currently under regulatory review in the U.S.
|
|
Reyvow
|
Acute treatment of migraine
|
Launched
|
Phase III
|
Received Schedule V classification from the Drug Enforcement Agency and launched in the U.S. in January 2020.
|
|
Solanezumab
|
Preclinical Alzheimer's disease
|
Phase III
|
Announced in February 2020 that a Phase III trial for people with dominantly inherited Alzheimer's disease (DIAD) did not meet the primary endpoint. We do not plan to pursue submission for DIAD. Phase III trial is ongoing for Anti-Amyloid Treatment in Asymptomatic Alzheimer's.
|
||
Tanezumab
|
Osteoarthritis pain
|
Submitted
|
Phase III
|
In partnership with Pfizer, we submitted to the FDA in the fourth quarter of 2019 and submitted in Europe in March 2020. We intend to pursue submission in Japan in 2020.
|
|
Cancer pain
|
Phase III
|
Phase III trial is ongoing.
|
|||
Oncology
|
|||||
Selpercatinib (LOXO-292)
|
Thyroid Cancer
|
Submitted
|
Phase III
|
Granted Breakthrough Therapy Designation(2). Granted Priority Review(3) from the FDA in the first quarter of 2020. Phase III trials are ongoing.
|
|
Lung Cancer
|
Submitted
|
Phase III
|
•
|
the Coronavirus Aid, Relief and Economic Security (CARES) Act and potential subsequent stimulus bills that focus on ensuring availability and access to lifesaving drugs during a public health crisis,
|
•
|
foreign reference pricing in Medicare and private insurance,
|
•
|
modifications to Medicare Parts B and D,
|
•
|
provisions that would allow the Department of Health and Human Services to negotiate prices for biologics and drugs in Medicare,
|
•
|
a reduction in biologic data exclusivity,
|
•
|
proposals related to Medicaid prescription drug coverage and manufacturer drug rebates,
|
•
|
proposals that would require biopharmaceutical manufacturers to disclose proprietary drug pricing information; and
|
•
|
state-level proposals related to prescription drug prices and reducing the cost of pharmaceuticals purchased by government health care programs.
|
|
Three Months Ended
March 31, |
|
|
||||||
|
2020
|
|
2019
|
|
Percent Change
|
||||
U.S. (1)
|
$
|
3,328.8
|
|
|
$
|
2,890.8
|
|
|
15
|
Outside U.S.
|
2,531.0
|
|
|
2,201.4
|
|
|
15
|
||
Revenue
|
$
|
5,859.8
|
|
|
$
|
5,092.2
|
|
|
15
|
|
Three Months Ended
March 31, |
|
|
||||||||||||||
|
2020
|
|
2019
|
||||||||||||||
Product
|
U.S. (1)
|
|
Outside U.S.
|
|
Total
|
|
Total
|
Percent Change
|
|||||||||
Trulicity
|
$
|
929.5
|
|
|
$
|
299.9
|
|
|
$
|
1,229.4
|
|
|
$
|
879.7
|
|
|
40
|
Humalog (2)
|
398.6
|
|
|
297.2
|
|
|
695.8
|
|
|
730.8
|
|
|
(5)
|
||||
Alimta
|
324.2
|
|
|
235.8
|
|
|
560.1
|
|
|
499.2
|
|
|
12
|
||||
Taltz
|
327.5
|
|
|
116.0
|
|
|
443.5
|
|
|
252.5
|
|
|
76
|
||||
Humulin
|
214.1
|
|
|
101.5
|
|
|
315.7
|
|
|
297.7
|
|
|
6
|
||||
Basaglar
|
230.4
|
|
|
73.3
|
|
|
303.7
|
|
|
251.4
|
|
|
21
|
||||
Forteo
|
122.5
|
|
|
149.8
|
|
|
272.4
|
|
|
312.9
|
|
|
(13)
|
||||
Jardiance (3)
|
144.6
|
|
|
122.9
|
|
|
267.5
|
|
|
203.6
|
|
|
31
|
||||
Cyramza
|
89.1
|
|
|
149.9
|
|
|
239.0
|
|
|
198.3
|
|
|
21
|
||||
Cymbalta
|
11.6
|
|
|
198.8
|
|
|
210.4
|
|
|
164.1
|
|
|
28
|
||||
Cialis
|
26.1
|
|
|
167.0
|
|
|
193.0
|
|
|
308.2
|
|
|
(37)
|
||||
Verzenio
|
129.4
|
|
|
58.6
|
|
|
188.0
|
|
|
109.4
|
|
|
72
|
||||
Olumiant
|
11.3
|
|
|
128.4
|
|
|
139.7
|
|
|
82.1
|
|
|
70
|
||||
Erbitux®
|
117.8
|
|
|
13.0
|
|
|
130.8
|
|
|
118.4
|
|
|
10
|
||||
Zyprexa®
|
11.2
|
|
|
87.2
|
|
|
98.4
|
|
|
107.2
|
|
|
(8)
|
||||
Trajenta® (4)
|
28.7
|
|
|
64.5
|
|
|
93.2
|
|
|
131.9
|
|
|
(29)
|
||||
Emgality
|
67.3
|
|
|
6.7
|
|
|
74.0
|
|
|
14.2
|
|
|
NM
|
||||
Other products
|
144.9
|
|
|
260.5
|
|
|
405.3
|
|
|
430.5
|
|
|
(6)
|
||||
Revenue
|
$
|
3,328.8
|
|
|
$
|
2,531.0
|
|
|
$
|
5,859.8
|
|
|
$
|
5,092.2
|
|
|
15
|
•
|
The increased customer buying patterns and patient prescription trends associated with COVID-19 that were experienced in the first quarter of 2020 will be largely reversed over the course of 2020;
|
•
|
The reduction in new-to-brand prescription trends will peak in the second quarter of 2020 in the U.S. and much of Europe;
|
•
|
Healthcare activity, including non-COVID-19 related patient visits with their physicians, will align more closely with historical levels in the second half of 2020;
|
•
|
Increased utilization of patient affordability programs and changes in segment mix due to increased U.S. unemployment will negatively impact U.S. pricing;
|
•
|
Clinical trial enrollment in existing studies, as well as initiation of new clinical trials, will resume in the second half of 2020; and
|
•
|
Investment in COVID-19 related research, testing and support will continue throughout 2020.
|
(a)
|
Evaluation of Disclosure Controls and Procedures. Under applicable SEC regulations, management of a reporting company, with the participation of the principal executive officer and principal financial officer, must periodically evaluate the company’s “disclosure controls and procedures,” which are defined generally as controls and other procedures of a reporting company designed to ensure that information required to be disclosed by the reporting company in its periodic reports filed with the SEC (such as this Form 10-Q) is recorded, processed, summarized, and reported on a timely basis.
|
(b)
|
Changes in Internal Controls. During the first quarter of 2020, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
|
Period
|
Total Number of
Shares Purchased
(in thousands)
|
|
Average Price Paid
per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
(in thousands)
|
|
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the
Plans or Programs
(in millions)
|
||||||
January 2020
|
3,026
|
|
|
$
|
137.87
|
|
|
3,026
|
|
|
$
|
1,082.9
|
|
February 2020
|
—
|
|
|
—
|
|
|
—
|
|
|
1,082.9
|
|
||
March 2020
|
601
|
|
|
137.87
|
|
|
601
|
|
|
1,000.0
|
|
||
Total
|
3,627
|
|
|
137.87
|
|
|
3,627
|
|
|
|
EXHIBIT 3.1
|
|
Amended Articles of Incorporation
|
|
|
|
EXHIBIT 3.2
|
|
Bylaws, as amended
|
|
|
|
EXHIBIT 31.1
|
|
Rule 13a-14(a) Certification of David A. Ricks, Chairman, President, and Chief Executive Officer
|
|
|
|
EXHIBIT 31.2
|
|
Rule 13a-14(a) Certification of Joshua L. Smiley, Senior Vice President and Chief Financial Officer
|
|
|
|
EXHIBIT 32.
|
|
Section 1350 Certification
|
|
|
|
EXHIBIT 101.
|
|
Interactive Data Files
|
|
|
|
EXHIBIT 104.
|
|
Cover Page Interactive Data File
|
Exhibit
|
|
|
EXHIBIT 3.1
|
|
|
|
|
|
EXHIBIT 3.2
|
|
|
|
|
|
EXHIBIT 31.1
|
|
|
|
|
|
EXHIBIT 31.2
|
|
|
|
|
|
EXHIBIT 32.
|
|
|
|
|
|
EXHIBIT 101.
|
|
Interactive Data Files (embedded within the Inline XBRL document)
|
|
|
|
EXHIBIT 104.
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
ELI LILLY AND COMPANY
|
|
|
(Registrant)
|
|
|
|
Date:
|
May 1, 2020
|
/s/Bronwen L. Mantlo
|
|
|
Bronwen L. Mantlo
|
|
|
Corporate Secretary
|
Date:
|
May 1, 2020
|
/s/Donald A. Zakrowski
|
|
|
Donald A. Zakrowski
|
|
|
Vice President, Finance and Chief Accounting Officer
|
1.
|
I have reviewed this report on Form 10-Q of Eli Lilly and Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 1, 2020
|
|
|
|
|
By:
|
|
/s/David A. Ricks
|
|
|
David A. Ricks
|
|
|
Chairman, President, and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Eli Lilly and Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 1, 2020
|
|
|
|
|
By:
|
|
/s/Joshua L. Smiley
|
|
|
Joshua L. Smiley
|
|
|
Senior Vice President and Chief Financial Officer
|
Date:
|
May 1, 2020
|
|
/s/David A. Ricks
|
|
|
|
David A. Ricks
|
|
|
|
Chairman, President, and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 1, 2020
|
|
/s/Joshua L. Smiley
|
|
|
|
Joshua L. Smiley
|
|
|
|
Senior Vice President and Chief Financial Officer
|