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Eli Lilly and Co.’s 3Q16 Estimates: Neuroscience Franchise

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Neuroscience franchise

Another franchise from Eli Lilly and Co.’s (LLY) human pharmaceuticals segment is the neuroscience franchise. The neuroscience franchise contributes over ~13% of total revenues for Lilly. Key drugs in this segment include Zyprexa, Cymbalta, and Strattera.

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Cymbalta

Cymbalta is an antidepressant used for the treatment of depression and anxiety, and at times in bone and muscle pain. Cymbalta sales are expected to decrease by over 19% to $197 million in 3Q16, as compared to ~$243 million in 3Q15, due to lower sales in both the US and international markets, and the negative impact of foreign exchange.

Zyprexa

Zyprexa is an antipsychotic drug used in the treatment of brain disorders like schizophrenia or bipolar disorders. The sales for Zyprexa is expected to decreased by ~22% to $183 million during 3Q16, as compared to $238 million for 3Q15, due to lower sales in international markets, and loss of patent exclusivity in Japan for use of Zyprexa in the treatment of schizophrenia, and a negative impact of foreign exchange on international sales. Zyprexa has generic competition from Mylan (MYL) and Teva Pharmaceuticals (TEVA).

Other drugs for neuroscience franchise

Other drugs for neuroscience franchise includes Strattera and Prozac. Strattera, a drug for attention-deficit or hyperactivity disorder, expected to report an increase in revenues to $210.8 million for 3Q16, as compared to $196.9 million for 3Q15, following increased sales worldwide. Prozac, another antidepressant from Lilly, is expected to report a decline in its revenues for 3Q16.

Strattera competes with Shire’s (SHPG) Vyvanse as well as Intuniv and Johnson & Johnson’s (JNJ) Concerta. Investors can consider ETFs like the iShares S&P Global Healthcare ETF (IXJ), which invests 1.8% of its total assets in Lilly, in order to divest risk.

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