How Did Eli Lilly’s Endocrinology Franchise Perform in 1Q16?

Endocrinology franchise

As discussed earlier, Eli Lilly’s (LLY) human pharmaceuticals segment reported an increase of ~5.5% at ~$4,110 million for 1Q16, as compared to ~$3,895 million for 1Q15. This segment deals with different therapeutic areas including endocrinology, neuroscience, oncology, cardiovascular, and others. The endocrinology franchise contributed ~36.1% of total revenues for Eli Lilly. Some of the franchise’s blockbuster drugs are Humalog, Humulin, and Forteo.

How Did Eli Lilly’s Endocrinology Franchise Perform in 1Q16?

Humalog

The Humalog portfolio consists of different meal-time insulin products used to lower the blood sugar levels in patients with diabetes. The sales for Humalog products decreased by ~11.4% to $606 million during 1Q16, as compared to $684 million for 1Q15. US sales fell ~14% in the US and 7% internationally. The decrease was due to a fall in the drug’s realized prices following the changes in rebate estimates and discounts. This decrease is a temporary effect, and the revenues will recover growth in coming quarters.

Humalog competes with Novolog from Novo Nordisk (NVO) while Sanofi (SNY) is developing a biosimilar for Humalog.

Humulin

The Humulin portfolio consists of concentrated insulin products used to lower the blood sugar levels in patients with type-one and type-two diabetes mellitus. These are used in cases where patients require a higher dosage of insulin. The sales of Humulin products increased by ~12.9% to $356 million in 1Q16, as compared to ~$316 million in 1Q15. This includes an increase of ~34% in the US sales and a decrease of 15% in international sales. The increase was due to higher realized prices following changes in government rebates and partially due to the increased sales.

Forteo

Forteo, another blockbuster drug from Eli Lilly, is used in the treatment of osteoporosis. Forteo sales rose by ~8.7% to $318.6 million in 1Q16, as compared to ~$293 million in 1Q15. This includes an increase of ~21% in US sales and flat international sales. The increase was due to higher realized prices following changes in government rebates in the US markets, partially offset by lower realized prices due to price revision in Japan and the negative impact of foreign exchange in international markets.

Some other drugs for osteoporosis include Allergan’s (ACT) Actonel and Roche’s (RHHBY) subsidiary Genentech’s Boniva.

Investors can consider ETFs like the VanEck Vectors Pharmaceutical ETF (PPH), which invests 4.6% of its portfolio in Eli Lilly or the iShares Core S&P 500 ETF (IVV), which holds ~0.5% of its total assets in Eli Lilly.