Eli Lilly and Company (NYSE:LLY) Q4 2017 Earnings Conference Call - Final Transcript
Jan 31, 2018 • 09:00 am ET
Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2017 Earnings Call. [Operator Instructions]
I would now like to turn the conference over to our host, Mr. Dave Ricks. Please go ahead, sir.
Good morning. Thank you for joining us for Eli Lilly and Company's fourth quarter 2017 earnings call. I'm Dave Ricks, Lilly's Chairman and CEO. Joining me on today's call are Josh Smiley, our CFO; Dr. Jan Lundberg, President of Lilly Research Labs; Enrique Conterno, President of Lilly Diabetes and Lilly USA; Dr. Sue Mahony, President of Lilly Oncology; Christi Shaw, President of Lilly Bio-Medicines; and Jeff Simmons, President of our Elanco Animal Health business. We're also joined by Kristina Wright, Chris Ogden, Kevin Hern and Phil Johnson of the IR team.
During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on Slide 3 and those outlined in our latest Forms 10-K and 10-Q filed with the SEC. Information we provide about our products and pipeline is for the benefit of the investment community only. It is not intended to be promotional and it is not sufficient for prescribing decisions.
We closed 2017 with another strong quarter, delivering 7% revenue growth, 20% operating income growth and important pipeline progress. Worldwide revenue growth was once again driven by our new pharmaceutical products. In addition, we continue to expand our margins, excluding the effect of FX on international inventories sold, gross margin as a percent of revenue increased by roughly 130 basis points and total expense as a percent of revenue declined by over 340 basis points to 52.8%.
We made progress advancing our pipeline. The FDA approved and we launched Taltz for active psoriatic arthritis in the US. The European Commission approved Taltz for active psoriatic arthritis in the EU and the FDA accepted our submissions for galcanezumab for migraine prevention as well as the resubmission of baricitinib for rheumatoid arthritis. On the clinical front, we initiated a Phase III clinical program for baricitinib in atopic dermatitis.
We announced that Cyramza did not show an overall survival benefit in first line gastric cancer, and we initiated clinical work on the connected diabetes ecosystem, including a trial to evaluate our automated insulin delivery system as well as development and clinical work on our connected insulin pen technology. In terms of capital deployment, we announced an 8% increase in the dividend reflecting our confidence in the continued growth prospects of the company and we repurchased $100 million of stock. We closed 2017 with strong momentum and we are well positioned to achieve our strategic deliverables in 2018 and beyond.
Slide 5 contains more details on these events as well as other key events since our October earnings call. I would also note that our analysis of strategic alternatives for Elanco is proceeding well. We're on track to communicate our decision on our Q2 earnings call in July.