28 Apr

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

WRITTEN BY Mike Benson

Neuroscience franchise

Another franchise from Eli Lilly’s (LLY) human pharmaceuticals segment is the neuroscience franchise. The neuroscience franchise contributed ~13.2% of total revenues for Eli Lilly. Key drugs in this segment include Zyprexa, Cymbalta, and Strattera.

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

Zyprexa

Zyprexa is an antipsychotic drug used in the treatment of brain disorders like schizophrenia or bipolar disorders. The sales for Zyprexa decreased by ~3% to $213 million during 1Q16, as compared to $219.5 million for 1Q15. The sales in Japan were nearly flat at ~$94 million in 1Q16, despite the loss of patent exclusivity in December 2015 for use in the treatment of schizophrenia. The company expects generic competition to begin in mid-2016. Zyprexa has generic competition from Mylan (MYL) and Teva Pharmaceuticals (TEVA).

Cymbalta

Cymbalta is an antidepressant used for the treatment of depression and anxiety and at times for the treatment of bone and muscle pain. The sales of Cymbalta decreased by ~31% to $199 million in 1Q16, as compared to ~$287 million in 1Q15. This includes a decrease of ~57% in US sales and a decrease of 25% in international sales. Cymbalta revenues declined due to the loss of exclusivity in Europe in 2014 while both these drugs saw a negative impact from foreign exchange for sales outside the US markets.

Other drugs in the neuroscience franchise

Other drugs in the neuroscience franchise include Strattera and Prozac. Strattera, a drug for attention-deficit or hyperactivity disorder, saw an 8% increase in revenues at $188 million for 1Q16, as compared to $174 million for 1Q15. The US sales for Strattera increased by 7% while the international sales increased by 10% during 1Q16. Prozac, another antidepressant from Eli Lilly, reported a 3% increase in revenues to $38 million for 1Q16.

Strattera competes with Shire’s (SHPG) Vyvanse and Intuniv and Johnson & Johnson’s (JNJ) Concerta. Investors can consider ETFs like the VanEck Vectors Pharmaceutical ETF (PPH), which invests 4.6% of its portfolio in Eli Lilly, or the iShares S&P Global Healthcare ETF (IXJ), which holds 1.7% of its total assets in Eli Lilly.

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