Eli Lilly and Company (NYSE:LLY) Q1 2018 Corporate Conference Call - Final Transcript
Apr 24, 2018 • 05:15 am ET
Ladies and gentlemen, thank you for standing by. Welcome to the Eli Lilly and Company Q1 2018 earnings call. [Operator Instructions]
I would now like to turn the conference over to Dave Ricks. Please go ahead.
Good morning. Thank you for joining us for Eli Lilly and Company's first quarter 2018 earnings call. I'm Dave Ricks, Lilly's Chairman and CEO. Joining me on today's call are Josh Smiley, our Chief Financial Officer; and Enrique Conterno, the 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. We're also joined by Kristina Wright, Jim Heaney, Kevin Hern and Phil Johnson of the Investor Relations team.
We also joined for the first time by Dan Skovronsky, our incoming President of Lilly Research Laboratories. Dan is succeeding Dr. Jan Lundberg who retires at the end of May. Jan has been key to our success as we navigated the Years YZ and return to growth for the series of successful products. We want to thank Jan for his all contributions to our company.
During this conference 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 Securities and Exchange Commission. The 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.
2018 is off to a good start. With first quarter revenue growth of 9%, which we leveraged into a 29% non-GAAP operating income growth and 37% non-GAAP EPS growth. New pharmaceutical products continue to be the drivers of our worldwide revenue growth. Led by Trulicity, Basaglar, Jardiance and Taltz, with growth in both US and international markets where launches continue to scale up. New product growth more than offset revenue declines resulting from loss of exclusivity on a number of established products. In addition, we continue to expand our margins this quarter. Excluding the effect of FX, our international inventory sold non-GAAP gross margin as a percent of revenue increased by nearly 70 basis points over Q1 of 2017.
And non-GAAP operating income as a percent of revenue increased by 775 basis points to 30.4%. Pipeline progress this quarter also included approval in launch of an additional indication and first line metastatic breast cancer for Verzenio based on the MONARCH 3 data. Positive Phase 3 studies of Taltz for ankylosing spondylitis, the positive Phase 3 study for Cyramza at high AFP patients with second line liver cancer. And the initiation of a Phase 3 study for Trulicity in 3 mg and 4.5 mg doses.
While we are pleased that the FDA Arthritis Advisory Committee supported the efficacy of both the 2-mg and 4-mg of baricitinib in RA and 2-mg