How Will Eli Lilly’s Alimta and Other Oncology Products Perform?
Eli Lilly and Company’s (LLY) human pharmaceutical segment includes its oncology franchise. Oncology contributes around 18.0% to Lilly’s total revenues. Key drugs in this segment include Alimta, Erbitux, and Cyramza. A new drug, Portrazza, was launched in US markets in December 2015.
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Alimta, a chemotherapy drug used in the treatment of patients with advanced NSCLC (non-small cell lung cancer), is expected to report a fall in revenues for 1Q17. The fall is mainly due to competition from other products in US markets.
Erbitux is a drug used in the treatment of metastatic colorectal cancer and head and neck cancer. Lilly took back the commercialization rights for Erbitux in North America from Bristol-Myers Squibb (BMY) on October 1, 2015. So Erbitux revenues for 1Q17 will be reported by Lilly. That’s expected to be further supported by increased sales in international markets, resulting in growth for Erbitux revenues in 1Q17.
Other drugs in the oncology franchise
Other drugs in Lilly’s oncology franchise include Cyramza and Portrazza. Cyramza revenues are expected to rise in 1Q17 following a strong uptake in Japan as well as its launch in European markets. Portrazza, a new drug launched in December 2015, is expected to report revenue growth in 1Q17.
To divest the risk, you can consider ETFs such as the iShares US Pharmaceuticals (IHE), which holds 6.3% of its total assets in Eli Lilly, 5.5% in Bristol-Myers Squibb (BMY), 3.6% in Mylan (MYL), and 7.0% in Allergan (AGN).