Eli Lilly and Co (LLY.N) raised its 2012 net profit forecast for the second time in as many weeks to reflect an early payment of $1.26 billion from former partner Amylin Pharmaceuticals Inc, which has been acquired by Bristol-Myers Squibb Co (BMY.N).
Diabetes specialist Amylin had ended its decade-long partnership with Lilly in November. The companies were partners in marketing Amylin's diabetes drug Byetta and its longer-acting version, Bydureon.
Bristol, which completed its Amylin purchase on Wednesday, has paid $1.7 billion apart from the cash consideration to cover Amylin's debt and its obligations to Eli Lilly.
"The early payment of the revenue-sharing obligation by Amylin allows Lilly to recognize the obligation's value in the near term, receive significant income in both 2012 and 2013, and further strengthen our balance sheet," Lilly's Chief Financial Officer Derica Rice said in a statement.
Lilly plans to use the cash to advance its "pipeline of more than 60 potential new medicines," among other corporate uses.
The drugmaker said it now expects net earnings per share to range between $3.72 and $3.82. Its forecast for adjusted earnings, excluding one-time items, remains unchanged.
Lilly late last month raised its 2012 net earnings outlook to $3.29 to $3.39 a share from $3.14 to $3.29 it had forecast earlier.
AstraZeneca (AZN.L) said earlier on Thursday it would pay $135 million to Bristol to buy an equal-say right in making decisions about drugs developed by Amylin.
This payment would be in addition to the $3.4 billion being paid by AstraZeneca to Bristol for a half share in Amylin's products. These medicines will be added to an existing diabetes alliance between the two major drugmakers.
Amylin's drugs for the fast-growing type 2 diabetes market included Byetta, launched in 2005, and Bydureon, which can be taken once a week and was approved by U.S. regulators earlier this year.
Lilly shares were down marginally at $42.76, while those of Bristol were down about 1 percent at $31.82 in morning trading on the New York Stock Exchange.
AstraZeneca shares were down about 1 percent at 2,993 pence on the London Stock Exchange.
(Reporting By Toni Clarke in Boston and Esha Dey in Bangalore; Editing by Gerald E. McCormick, Maju Samuel)