Full Press Release Details
INDIANAPOLIS , Jan. 30, 2020 /PRNewswire/ -- Eli Lilly and Company (NYSE: LLY ) today announced financial results for the fourth quarter and full year of 2019.
| $ in millions, except per share data | Fourth Quarter | % | Full Year | % | |||||||||||
| 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||
| Revenue | $ | 6,114.0 | $ | 5,637.6 | 8% | $ | 22,319.5 | $ | 21,493.3 | 4% | |||||
| Net Income – Reported | 1,495.7 | 1,125.1 | 33% | 8,318.4 | 3,232.0 | NM | |||||||||
| EPS – Reported | 1.64 | 1.10 | 49% | 8.89 | 3.13 | NM | |||||||||
| Net Income – Non-GAAP | 1,583.3 | 1,258.3 | 26% | 5,568.2 | 5,272.1 | 6% | |||||||||
| EPS – Non-GAAP | 1.73 | 1.32 | 31% | 6.04 | 5.44 | 11% | |||||||||
| NM - not meaningful |
Certain financial information for 2019 and 2018 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP), include all revenue and expenses recognized during the periods, and reflect Elanco Animal Health (Elanco) as discontinued operations for all periods presented. Non-GAAP measures reflect adjustments for the items described in the reconciliation tables later in the release, and assume that the disposition of Elanco occurred at the beginning of all periods presented (including the benefit from the reduction in shares of common stock outstanding). The company's 2020 financial guidance is being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company's business.
"Lilly is in the early phase of an exciting period of growth for the company. The combination of strong revenue growth from our newer medicines and prudent expense control across our business enabled Lilly to invest more in our R&D pipeline and still deliver impressive earnings growth in the fourth quarter and full-year 2019," said David A. Ricks , Lilly's chairman and CEO. "We look forward to continuing this progress in 2020, as our scientists work to expand our portfolio of innovative medicines to offer new treatment options for patients in the areas of diabetes, oncology, immunology, and neuroscience."
Key Events Over the Last Three Months
Business Development/Other Developments
Fourth-Quarter Reported Results
In the fourth quarter of 2019, worldwide revenue was $6.114 billion , an increase of 8 percent compared with the fourth quarter of 2018. The increase in revenue was driven by a 10 percent increase due to volume, partially offset by a 1 percent decrease due to lower realized prices.
Revenue in the U.S. increased 7 percent, to $3.519 billion , as increased volume of 8 percent was partially offset by lower realized prices. Increased U.S. volume for key growth products including Trulicity ® , Taltz ® , Verzenio ® , Jardiance, Emgality ® and Basaglar, was partially offset by decreased volume for Cialis ® due to loss of patent exclusivity, lower volume for Forteo ® , as well as the impact from the product withdrawal of Lartruvo ® .
Revenue outside the U.S. increased 10 percent, to $2.595 billion , driven by increased volume of 12 percent, which was primarily from key growth products, including Trulicity, Olumiant ® , Taltz, Verzenio, and Jardiance, partially offset by decreased volume for Strattera ® due to loss of patent exclusivity and the impact of the product withdrawal of Lartruvo. In addition, revenue outside the U.S. benefited from a milestone from Bayer Consumer Care AG resulting from its exclusive development and commercialization license for Vitrakvi ® . The increase in revenue due to volume was partially offset by the unfavorable impact of foreign exchange rates and lower realized prices.
Gross margin increased 7 percent, to $4.831 billion , in the fourth quarter of 2019 compared with the fourth quarter of 2018. Gross margin as a percent of revenue was 79.0 percent, a decrease of 1.0 percentage point compared with the fourth quarter of 2018. The decrease in gross margin percent
was primarily due to unfavorable product mix, the unfavorable effect of foreign exchange rates on international inventories sold, higher intangibles amortization expense, and the impact of lower realized prices on revenue.
Total operating expenses in the fourth quarter of 2019, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 6 percent to $3.280 billion compared with the fourth quarter of 2018. Research and development expenses increased 14 percent to $1.581 billion , or 25.9 percent of revenue, driven by higher development expenses for late-stage assets. Marketing, selling, and administrative expenses remained relatively flat at $1.698 billion , as lower spending on late life-cycle products and ongoing cost containment measures were offset by increased expenses for recently launched products.
There were no acquired in-process research and development charges in the fourth quarter of 2019. In the fourth quarter of 2018, the company recognized acquired in-process research and development charges of $329.4 million related to business development transactions with Dicerna Pharmaceuticals, SIGA Technologies, Chugai Pharmaceuticals, NextCure, and Hydra Biosciences.
Operating income in the fourth quarter of 2019 was $1.400 billion , compared to $900.2 million in the fourth quarter of 2018. The increase in operating income was primarily driven by lower acquired in-process research and development charges and higher gross margin, partially offset by higher research and development expenses.
Other income was $262.9 million in the fourth quarter of 2019, compared with $31.4 million in the fourth quarter of 2018. The increase in other income was primarily driven by the gain on the sale of the company's antibiotics business in China and higher net gains on investment securities, partially offset by a charge related to the repurchase of debt.
The effective tax rate was 10.1 percent in the fourth quarter of 2019, and contained net discrete tax benefits, including a tax benefit from a capital loss on the disposition of subsidiary stock. During the fourth quarter of 2018, the company recorded an income tax benefit of $189.8 million despite earning $931.6 million of income before income taxes. The 2018 income tax benefit was primarily due to U.S. tax reform adjustments of $344.6 million .
In the fourth quarter of 2019, net income and earnings per share were $1 .496 billion and $1.64 , respectively, compared with net income of $1 .125 billion and earnings per share of $1.10 in the fourth quarter of 2018. The increase in net income in the fourth quarter of 2019 was primarily driven by higher operating income and higher other income, partially offset by higher income taxes. In addition to the increase in net income, earnings per share in the fourth quarter of 2019 significantly benefited from lower weighted-average shares outstanding as a result of the Elanco exchange offer and share repurchases.
Fourth-Quarter Non-GAAP Measures
On a non-GAAP basis, fourth-quarter 2019 gross margin increased 7 percent, to $4.885 billion compared with the fourth quarter of 2018. Gross margin as a percent of revenue was 79.9 percent, a decrease of 0.7 percentage points. The decrease in gross margin percent was primarily due to unfavorable product mix, the unfavorable effect of foreign exchange rates on international inventories sold, and the impact of lower realized prices on revenue.
Operating income on a non-GAAP basis increased $145.6 million , or 10 percent, to $1.605 billion in the fourth quarter of 2019 compared with the fourth quarter of 2018, due to higher gross margin, partially offset by higher research and development expenses.
Other income on a non-GAAP basis was $205.6 million in the fourth quarter of 2019, compared with $31.4 million in the fourth quarter of 2018. The increase in other income was primarily due to higher net gains on investment securities and higher net foreign currency gains, partially offset by higher net interest expense.
The effective tax rate on a non-GAAP basis was 12.6 percent in the fourth quarter of 2019, compared with 15.6 percent in the fourth quarter of 2018. The lower effective tax rate for the fourth quarter of 2019 was driven primarily by an increase in net discrete tax benefits.
On a non-GAAP basis, in the fourth quarter of 2019, net income increased 26 percent, to $1.583 billion , while earnings per share increased 31 percent, to $1.73 , compared with $1.258 billion and $1.32 , respectively, in the fourth quarter of 2018. The increase in net income was driven primarily by higher other income and higher operating income. The increase in earnings per share was driven primarily by the increase in net income and, to a lesser extent, the benefit from lower weighted-average shares outstanding as a result of share repurchases. Non-GAAP weighted average shares outstanding for both periods have been reduced by the approximately 65 million shares retired in the Elanco exchange offer.
For further detail of non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information" table later in this press release.
| Fourth Quarter | |||||||
| 2019 | 2018 | % Change | |||||
| Earnings per share (reported) | $ | 1.64 | $ | 1.10 | 49% | ||
| Gain on sale of China antibiotics business | (.26) | — | |||||
| Charge related to repurchase of debt | .22 | — | |||||
| Asset impairment, restructuring and other special charges | .14 | .18 | |||||
| Amortization of intangible assets | .05 | .03 | |||||
| Income taxes (a) | (.05) | (.33) | |||||
| Acquired in-process research and development | — | .27 | |||||
| Impact of reduced shares outstanding for non-GAAP reporting (b) | — | .07 | |||||
| Earnings per share (non-GAAP) | $ | 1.73 | $ | 1.32 | 31% | ||
| Numbers may not add due to rounding. (a) For the fourth quarter of 2019, amount relates to a tax benefit from a capital loss on the disposition of subsidiary stock. For the fourth quarter of 2018, amount relates to adjustments to the 2017 Toll Tax for U.S. tax reform proposed regulations and tax expenses associated with the separation of Elanco. (b) Non-GAAP earnings per share assume that the disposition of Elanco occurred at the beginning of all periods presented and, therefore, exclude the approximately 65.0 million shares of Lilly common stock retired in the Elanco exchange offer. |
Year-to-Date Reported Results
For the full year 2019, worldwide revenue increased 4 percent compared with 2018 to $22.319 billion . The revenue increase was driven by an 8 percent increase due to volume, partially offset by a 3 percent decrease due to lower realized prices and a 1 percent decrease due to the unfavorable impact of foreign exchange rates.
Revenue in the U.S. increased 3 percent to $12.723 billion , driven by increased volume for key growth products, including Trulicity, Taltz, Verzenio, Jardiance, Emgality and Basaglar. The increase in revenue was partially offset by decreased volume for products that have lost exclusivity, primarily Cialis, as well as the impact from the product withdrawal of Lartruvo, and lower volume for Forteo. Excluding Cialis, volume in the U.S. grew 15 percent. The increase in U.S. revenue was negatively impacted by lower realized prices for several products, primarily Trulicity.
Revenue outside the U.S. increased 5 percent to $9.597 billion , due to increased volume for key growth products, including Trulicity, Olumiant, Taltz, Jardiance and Verzenio. The increase in revenue was partially offset by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.
Gross margin increased 5 percent to $17.598 billion in 2019. Gross margin as a percent of revenue was 78.8 percent, an increase of 0.6 percentage points compared with 2018. The increase in gross margin percent was primarily due to the favorable impact of foreign exchange rates on international inventories sold and lower intangibles amortization expense, partially offset by unfavorable product mix, the impact of lower realized prices on revenue, and charges resulting from the product withdrawal of Lartruvo.
Total operating expenses, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 7 percent to $11.809 billion in 2019. Research and development expenses increased 11 percent to $5.595 billion , or 25.1 percent of revenue, driven by higher late-stage development expenses. Marketing, selling and administrative expenses increased 4 percent to $6.214 billion , primarily due to increased marketing expenses for recently launched products, partially offset by lower expenses for late life-cycle products.
In 2019, the company recognized acquired in-process research and development charges of $239.6 million resulting from business development transactions with AC Immune, Centrexion Therapeutics, ImmuNext, and Avidity Biosciences. In 2018, the company recognized acquired in-process research and development charges of $1.984 billion , primarily related to the acquisition of ARMO BioSciences and the business development transaction with Dicerna Pharmaceuticals.
Operating income in 2019 increased 41 percent compared with 2018 to $4.974 billion , driven primarily by lower acquired in-process research and development and, to a lesser extent, higher gross margin, partially offset by higher operating expenses.
Other income was $291.6 million in 2019 compared with $145.6 million in 2018. The increase in other income was primarily driven by higher net gains on investment securities and the gain on the sale of the company's antibiotics business in China , partially offset by the charge related to the repurchase of debt and higher net interest expense.
For the full year 2019, the effective tax rate was 11.9 percent, compared with an effective tax rate of 14.4 percent for the full year 2018. The higher effective tax rate in 2018 was primarily due to non-deductible acquired in-process research and development charges.
For the full year 2019, net income and earnings per share were $8.318 billion and $8.89 , respectively, compared with $3.232 billion , and $3.13 , respectively, in 2018. The increases in net income and earnings per share during 2019 were driven primarily by the gain recognized on the disposition of Elanco as well as higher operating income. In addition to the increase in net income, earnings per share in 2019 significantly benefited from lower weighted-average shares outstanding as a result of the Elanco exchange offer and share repurchases.
Year-to-Date Non-GAAP Measures
On a non-GAAP basis for the full year 2019, gross margin increased 4 percent, to $17.888 billion compared with the full year 2018. Gross margin as a percent of revenue for the full year 2019 was 80.1 percent, compared to 79.8 percent for the full year 2018.
Operating income on a non-GAAP basis decreased $54.8 million , or 1 percent, to $6.079 billion driven by higher operating expenses, partially offset by higher gross margin.
Other income on a non-GAAP basis was $234.3 million for the full year 2019, compared with $119.8 million for the full year 2018. The increase in other income was primarily due to higher net gains on investment securities, partially offset by higher net interest expense.
The effective tax rate on a non-GAAP basis was 11.8 percent for the full year 2019, compared with 15.7 percent for the full year 2018. The lower effective tax rate was driven primarily by an increase in net discrete tax benefits resulting from the resolution of certain global income tax audits.
On a non-GAAP basis, net income increased 6 percent and earnings per share increased 11 percent to $5.568 billion , and $6.04 , respectively. The increase in net income was driven primarily by lower tax expense and higher other income, partially offset by lower operating income. The increase in earnings per share was driven by the increase in net income as well as the benefit from lower weighted-average shares outstanding as a result of share repurchases. Non-GAAP weighted average shares outstanding for both periods have been reduced by the approximately 65 million shares retired in the Elanco exchange offer.
For further detail of non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information" table later in this press release.
| Year-to-Date | ||||||||
| 2019 | 2018 | %Change | ||||||
| Earnings per share (reported) | $ | 8.89 | $ | 3.13 | NM | |||
| Discontinued operations | (3.93) | (.08) | ||||||
| Earnings per share from continuing operations (reported) | 4.96 | 3.05 | 63% | |||||
| Asset impairment, restructuring and other special charges | .58 | .24 | ||||||
| Gain on sale of China antibiotics business | (.26) | — | ||||||
| Charge related to repurchase of debt | .22 | — | ||||||
| Acquired in-process research and development | .21 | 1.96 | ||||||
| Amortization of intangible assets | .18 | .28 | ||||||
| Lartruvo charges | .14 | — | ||||||
| Impact of reduced shares outstanding for non-GAAP reporting (a) | .07 | .20 | ||||||
| Income taxes (b) | (.05) | (.27) | ||||||
| Other, net | — | (.02) | ||||||
| Earnings per share (non-GAAP) | $ | 6.04 | $ | 5.44 | 11% | |||
| Numbers may not add due to rounding. NM - not meaningful (a) Non-GAAP earnings per share assume that the disposition of Elanco occurred at the beginning of all periods presented and, therefore, exclude the approximately 65.0 million shares of Lilly common stock retired in the Elanco exchange offer. (b) For 2019, amount relates to a tax benefit from a capital loss on the disposition of subsidiary stock. For 2018, amount relates to adjustments to the 2017 Toll Tax for U.S. tax reform proposed regulations and tax expenses associated with the separation of Elanco. |
| Selected Revenue Highlights | ||||||||||||||||||||
| (Dollars in millions) | Fourth Quarter | Year-to-Date | ||||||||||||||||||
| Selected Products | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||
| Trulicity | $ | 1,208.1 | $ | 924.7 | 31% | $ | 4,127.8 | $ | 3,199.1 | 29% | ||||||||||
| Humalog (a) | 763.4 | 770.4 | (1)% | 2,820.7 | 2,996.5 | (6)% | ||||||||||||||
| Alimta | 530.7 | 556.9 | (5)% | 2,115.8 | 2,132.9 | (1)% | ||||||||||||||
| Forteo | 360.2 | 437.1 | (18)% | 1,404.7 | 1,575.6 | (11)% | ||||||||||||||
| Taltz | 420.1 | 307.0 | 37% | 1,366.4 | 937.5 | 46% | ||||||||||||||
| Humulin ® | 348.0 | 337.4 | 3% | 1,290.1 | 1,331.4 | (3)% | ||||||||||||||
| Basaglar | 307.2 | 232.2 | 32% | 1,112.6 | 801.2 | 39% | ||||||||||||||
| Jardiance (b) | 268.0 | 193.2 | 39% | 944.2 | 658.3 | 43% | ||||||||||||||
| Cyramza | 245.1 | 220.6 | 11% | 925.1 | 821.4 | 13% | ||||||||||||||
| Cialis | 197.8 | 350.7 | (44)% | 890.5 | 1,851.8 | (52)% | ||||||||||||||
| Verzenio | 179.1 | 83.1 | NM | 579.7 | 255.0 | NM | ||||||||||||||
| Olumiant | 127.8 | 70.1 | 82% | 426.9 | 202.5 | NM | ||||||||||||||
| Emgality | 66.3 | 4.9 | NM | 162.5 | 4.9 | NM | ||||||||||||||
| Total Revenue | 6,114.0 | 5,637.6 | 8% | 22,319.5 | 21,493.3 | 4% | ||||||||||||||
| (a) Humalog includes Insulin Lispro (b) Jardiance includes Glyxambi ® and Synjardy ® NM – not meaningful; Numbers may not add due to rounding |
Fourth-quarter 2019 worldwide Trulicity revenue was $1.208 billion , an increase of 31 percent compared with the fourth quarter of 2018. U.S. revenue increased 29 percent, to $942.0 million , driven by increased demand, partially offset by lower realized prices. Trulicity's lower realized prices in the U.S. were primarily due to changes in segment mix, increased coverage gap funding requirements in Medicare Part D, and higher contracted rebates, partially offset by changes in estimates for rebates and discounts. Revenue outside the U.S. was $266.1 million , an increase of 36 percent, driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates and lower realized prices.
For the full year 2019, worldwide Trulicity revenue was $4.128 billion , an increase of 29 percent compared with the full year 2018. U.S. revenue increased 25 percent, to $3.155 billion , driven by higher demand, partially offset by lower realized prices. Revenue outside the U.S. increased 42 percent, to $972.7 million , primarily driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.
For the fourth quarter of 2019, worldwide Humalog revenue decreased 1 percent compared with the fourth quarter of 2018, to $763.4 million . Revenue in the U.S. increased 3 percent, to $468.7 million , driven primarily by increased volume and higher realized prices due to segment mix. Revenue outside the U.S. decreased 7 percent, to $294.7 million , primarily driven by decreased volume and, to a lesser extent, the unfavorable impact of foreign exchange rates.
For the full year 2019, worldwide Humalog revenue decreased 6 percent to $2.821 billion compared with the full year 2018. U.S. Humalog revenue for 2019 was $1.670 billion , a 7 percent decrease, primarily driven by lower realized prices and decreased demand. Humalog revenue outside the U.S. was $1.151 billion , a 5 percent decrease, primarily driven by the unfavorable impact of foreign exchange rates.
For the fourth quarter of 2019, worldwide Alimta revenue decreased 5 percent compared with the fourth quarter of 2018, to $530.7 million . U.S. revenue decreased 1 percent, to $313 .7 million, primarily driven by lower realized prices due to changes in estimates for rebates and discounts, partially offset by increased demand. Revenue outside the U.S. decreased 10 percent to $217.0 million , primarily driven by lower realized prices, partially offset by increased volume.
For the full year 2019, worldwide Alimta revenue decreased 1 percent to $2.116 billion compared with the full year 2018. U.S. Alimta revenue for 2019 was $1.219 billion , an 8 percent increase, driven by increased demand, partially offset by lower realized prices. Alimta revenue outside the U.S. was $896.4 million , an 11 percent decrease, driven by lower realized prices and, to a lesser extent, the unfavorable impact of foreign exchange rates and lower volume resulting from the entry of generic pemetrexed in Germany .
For the fourth quarter of 2019, worldwide Forteo revenue decreased 18 percent compared with the fourth quarter of 2018, to $360.2 million . U.S. revenue decreased 25 percent, to $171.7 million , primarily driven by decreased demand. Revenue outside the U.S. decreased 10 percent to $188 .5 million, primarily driven by decreased volume and, to a lesser extent, lower realized prices.
For the full year 2019, worldwide Forteo revenue decreased 11 percent to $1.405 billion compared with the full year 2018. U.S. Forteo revenue for 2019 was $645.5 million , a 15 percent decrease primarily driven by decreased demand. Forteo revenue outside the U.S. was $759.1 million , a 7 percent decrease driven by decreased volume and, to a lesser extent, the unfavorable impact of foreign exchange rates and lower realized prices.
The company expects further volume declines for Forteo as a result of competitive dynamics in the U.S. and the entry of generic and biosimilar competition following the loss of patent exclusivity in the third quarter of 2019 in the U.S., Japan and major European markets.
For the fourth quarter of 2019, worldwide Taltz revenue increased 37 percent compared with the fourth quarter of 2018, to $420 .1 million. U.S. revenue increased 30 percent, to $317 .2 million, driven by increased demand, partially offset by lower realized prices due to unfavorable segment mix. Revenue outside the U.S. increased 62 percent, to $102.8 million , primarily driven by increased volume from recent launches, partially offset by lower realized prices and the unfavorable impact of foreign exchange rates.
For the full year 2019, Taltz generated worldwide revenue of $1.366 billion , an increase of 46 percent compared with the full year 2018. U.S. revenue was $1.017 billion , an increase of 38 percent primarily driven by increased demand, partially offset by lower realized prices. Revenue outside the U.S. was $349.6 million , an increase of 76 percent, driven by increased volume from recent launches, partially offset by the unfavorable impact of foreign exchange rates.
For the fourth quarter of 2019, worldwide Humulin revenue increased 3 percent compared with the fourth quarter of 2018, to $348.0 million . U.S. revenue increased 3 percent, to $240.1 million , driven by increased volume and higher realized prices due to changes in estimates for rebates and discounts. Revenue outside the U.S. increased 3 percent, to $107.9 million , due to higher realized prices and increased volume, partially offset by the unfavorable impact of foreign exchange rates.
For the full year 2019, worldwide Humulin generated revenue of $1.290 billion , a decrease of 3 percent compared with the full year 2018. U.S. revenue was $879.7 million , a 3 percent decrease, driven by lower realized prices, partially offset by increased volume. Revenue outside the U.S. was $410.4 million , a 3 percent decrease, primarily driven by the unfavorable impact of foreign exchange rates, partially offset by increased volume and, to a lesser extent, higher realized prices.
For the fourth quarter of 2019, worldwide Basaglar revenue increased 32 percent compared with the fourth quarter of 2018, to $307.2 million . U.S. revenue increased 34 percent, to $243.5 million , driven by higher realized prices and, to a lesser extent, increased demand. Revenue outside the U.S. increased 28 percent, to $63 .7 million, driven by increased volume, partially offset by lower realized prices and the unfavorable impact of foreign exchange rates. Basaglar is part of the company's alliance with Boehringer Ingelheim, and Lilly reports total sales of Basaglar as revenue, with payments made to Boehringer Ingelheim for its portion of the gross margin reported as cost of sales.
For the full year of 2019, Basaglar generated worldwide revenue of $1.113 billion , an increase of 39 percent compared with the full year 2018. U.S. revenue was $876.2 million , an increase of 41 percent, driven by higher realized prices and increased demand. Revenue outside of the U.S. was $236.3 million , an increase of 32 percent, driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.
The company's worldwide Jardiance revenue during the fourth quarter of 2019 was $268.0 million , an increase of 39 percent compared with the fourth quarter of 2018. U.S. revenue increased 36 percent, to $157.5 million , driven by increased demand. Revenue outside the U.S. was $110.5 million , an increase of 42 percent, driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates. Jardiance is part of the company's alliance with Boehringer Ingelheim, and Lilly reports as revenue a portion of Jardiance's gross margin.
For the full year 2019, worldwide Jardiance revenue was $944.2 million , an increase of 43 percent compared with the full year 2018. U.S. revenue increased 41 percent, to $565.9 million , driven by increased demand. Revenue outside the U.S. increased 47 percent, to $378.3 million , primarily driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates.
For the fourth quarter of 2019, worldwide Cyramza revenue was $245 .1 million, an increase of 11 percent compared with the fourth quarter of 2018. U.S. revenue was $87 .9 million, an increase of 9 percent, primarily driven by increased demand. Revenue outside the U.S. was $157 .2 million, an increase of 12 percent, primarily driven by increased volume.
For the full year 2019, worldwide Cyramza revenue was $925.1 million , an increase of 13 percent compared with the full year 2018. U.S. revenue increased 15 percent, to $335.3 million , driven by increased demand and, to a lesser extent, higher realized prices. Revenue outside the U.S. increased 11 percent, to $589.9 million , primarily due to increased volume, partially offset by the unfavorable impact of foreign exchange rates and lower realized prices.
For the fourth quarter of 2019, worldwide Cialis revenue decreased 44 percent compared with the fourth quarter of 2018, to $197.8 million . U.S. revenue was $22.4 million in the fourth quarter, an 87 percent decrease compared with the fourth quarter of 2018, driven by decreased demand due to generic competition. Revenue outside the U.S. decreased 1 percent to $175.4 million , driven by the unfavorable impact of foreign exchange rates, partially offset by higher realized prices.
For the full year 2019, worldwide Cialis revenue decreased 52 percent to $890.5 million compared with the full year 2018. U.S. Cialis revenue for 2019 was $231.7 million , a 79 percent decrease, driven by decreased demand due to generic competition. Cialis revenue outside the U.S. was $658.8 million , a 9 percent decrease, driven by the unfavorable impact of foreign exchange rates, lower volume due to the loss of exclusivity in Europe and, to a lesser extent, lower realized prices.
For the fourth quarter of 2019, Verzenio generated worldwide revenue of $179.1 million , an increase of $21.9 million compared with the third quarter of 2019. U.S. revenue was $131.2 million , an increase of $6.4 million compared with the third quarter of 2019, primarily driven by increased demand. Revenue outside the U.S. was $47.9 million , an increase of $15.4 million compared with the third quarter of 2019.
For the full year of 2019, Verzenio generated worldwide revenue of $579.7 million . U.S. revenue increased 83 percent compared with the full year 2018 to $454.8 million , driven by increased demand, and, to a lesser extent, higher realized prices. Revenue outside of the U.S. was $124.9 million , driven by higher volume from recent international launches.
For the fourth quarter of 2019, Olumiant generated worldwide revenue of $127.8 million . U.S. revenue was $13.0 million . Revenue outside the U.S. was $114.9 million , an increase of 74 percent compared with the fourth quarter of 2018, driven by increased demand, partially offset by lower realized prices and the unfavorable impact of foreign exchange rates.
For the full year of 2019, Olumiant generated worldwide revenue of $426.9 million , an increase of $224.4 million compared with the full year 2018. U.S. revenue was $42.2 million . Revenue outside of the U.S. increased 96 percent, to $384.7 million , driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.
For the fourth quarter of 2019, Emgality generated worldwide revenue of $66.3 million , an increase of $18.5 million compared with the third quarter of 2019. U.S. revenue was $63.1 million , an increase of $17.3 million compared with the third quarter of 2019, primarily driven by increased demand. Revenue outside of the U.S. was $3.2 million in the fourth quarter of 2019.
For the full year of 2019, Emgality generated worldwide revenue of $162.5 million . U.S. revenue was $154.9 million . Revenue outside of the U.S. was $7.7 million .
2020 Financial Guidance
The company has updated certain elements of its 2020 financial guidance on both a reported basis and non-GAAP basis to reflect the pending acquisition of Dermira. On a reported basis, earnings per share for 2020 are now expected to be in the range of $6.18 to $6.28 . On a non-GAAP basis, the company reaffirmed earnings per share for 2020 to be in the range of $6.70 to $6.80 .
| 2020 Expectations | % Change from 2019 | |
| Earnings per share (reported) (a) | $6.18 to $6.28 | 25% to 27% |
| Amortization of intangible assets | .31 | |
| Dermira charges (b) | .21 | |
| Earnings per share (non-GAAP) | $6.70 to $6.80 | 11% to 13% |
| Numbers may not add due to rounding (a) Reported earnings per share percent change from 2019 calculated based on change from 2019 earnings per share from continuing operations. (b) Includes estimated charges for inventory step-up, accelerated vesting of employee equity awards, amortization of intangible assets, and other integration costs associated with the pending acquisition of Dermira. Amounts are estimates and may change after the acquisition is completed. |
The company now anticipates 2020 revenue between $23.7 billion and $24.2 billion . Revenue growth is still expected to be driven by volume from key growth products including Trulicity, Taltz, Basaglar, Jardiance, Verzenio, Cyramza, Olumiant, Emgality, Baqsimi, and the expected launch of Reyvow TM . Revenue growth could also benefit from the addition of QBREXZA revenue from the pending acquisition of Dermira, as well as the potential launch of other new medicines. Revenue growth is expected to be partially offset by lower revenue for products that have lost patent exclusivity, including the expected entry of generic competition for Forteo in the U.S. Revenue growth is also expected to be partially offset by a low-single digit net price decline in the U.S. driven primarily by rebates and legislated increases to Medicare Part D cost sharing, patient affordability programs, and net price declines in China , Japan and Europe .
Gross margin as a percent of revenue is still expected to be approximately 79.0 percent on a reported basis and approximately 81.0 percent on a non-GAAP basis.
Marketing, selling and administrative expenses are now expected to be in the range of $6.2 billion to $6.4 billion . Research and development expenses are still expected to be in the range of $5.6 billion to $5.9 billion .
Operating margin percentage, defined as operating income as a percent of revenue, is now expected to be approximately 28 percent on a reported basis and is still expected to be 31 percent on a non-GAAP basis.