What You Should Know about Eli Lilly’s Oncology Franchise

Eli Lilly and Company’s (LLY) Human Pharmaceuticals segment also contains its oncology franchise. Key drugs in this franchise include Alimta, Erbitux, and Cyramza. A new drug, Portrazza, was launched in US markets in December 2015.

Alimta is a chemotherapy drug used in the treatment of patients with advanced non-small cell lung cancer. Alimta sales fell ~9% YoY (year-over-year) to $570 million in 3Q16, as compared to $628 million in 3Q15. This included a 7% fall in US markets and a ~12% fall in international sales.

Alimta lost its market share to competition from other immuno-oncology products in US markets, while international sales were impacted by the continuous uptake of the generic version and lower average prices. Alimta faces competition from one of Allergan’s (AGN) products as well.

Erbitux is a drug used to treat metastatic colorectal cancer as well as head and neck cancer. Erbitux sales doubled to $185 million in 3Q16, as compared to ~$86 million in 3Q15.

Notably, Lilly has taken back the commercialization rights for Erbitux in North America from Bristol-Myers Squibb (BMY) as of October 1, 2015. This drove US revenues, and a 6% rise in international revenues further added to Erbitux reported revenues. Erbitux competes with Roche’s (RHHBY) Avastin and Amgen’s (AMGN) Vectibix.

Other drugs in Lilly’s oncology franchise include Cyramza, Gemzar, and Portrazza. Cyramza revenues rose 43% in 3Q16 following a strong uptake in Japan and a launch in European markets. Portrazza is a new drug launched in December 2015 in US markets and reported revenues of ~$5 million in 3Q16.

To divest risk while gaining exposure to Lilly, investors can consider ETFs like the PowerShares Dynamic Large Growth ETF (PWB), which has 3.2% of its portfolio invested in Lilly.