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Eli Lilly’s 2Q17 Earnings Rose 8% Year-over-Year

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Part 5
Eli Lilly’s 2Q17 Earnings Rose 8% Year-over-Year PART 5 OF 10

Eli Lilly in 2Q17: Oncology Products Lose Revenues

Oncology franchise

Eli Lilly and Company’s (LLY) Human Pharmaceuticals segment includes its oncology franchise. Key drugs in this segment include Alimta, Erbitux, Cyramza, and Portrazza.

Eli Lilly in 2Q17: Oncology Products Lose Revenues

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Alimta

Alimta is a chemotherapy drug used in the treatment of patients with advanced non-small cell lung cancer. Alimta sales fell ~12.0% to $532.9 million in 2Q17 compared to $607.1 million in 2Q16. That included a 6.0% fall in US markets and an ~18.0% fall in international sales. Alimta is exposed to competition from other products in US markets as well as generic competition in international markets.

Erbitux

Erbitux, a drug used in the treatment of metastatic colorectal cancer and head and neck cancer, reported a fall in sales of 12.0% to $159.1 million in 2Q17 compared to ~$180.6 million in 2Q16. Eli Lilly took back the commercialization rights for Erbitux in North America from Bristol-Myers Squibb (BMY) on October 1, 2015. Revenues for the drug have fallen due to competition from other products. The US market reported a fall of 15.0%, while the international market reported a rise of 10.0% in 2Q17. Erbitux competes with Roche’s (RHHBY) Avastin and Amgen’s (AMGN) Vectibix.

Other drugs in the oncology franchise

Other drugs in the oncology franchise include Cyramza and Portrazza. Cyramza revenues rose 27.0% to $186.3 million in 2Q17 following a strong uptake in international markets. Portrazza reported revenues of ~$2.3 million in 2Q17, which was a fall of 43.0% compared to 2Q16.

To divest the company-specific risks, you can consider the PowerShares Dynamic Large Cap Growth ETF (PWB), which holds 3.1% of its total assets in Eli Lilly. PWB also holds 3.4% in UnitedHealth Group (UNH), 3.2% in Celgene (CELG), and 3.1% in Bristol-Myers Squibb (BMY).

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