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Eli Lilly & Co.’s Endocrine Franchise

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Endocrine franchise

As we discussed in the previous article, Eli Lilly & Co.’s (LLY) Human Pharmaceuticals segment reported an ~8% increase in revenues to ~$4.9 billion for 4Q16, compared to ~$4.6 billion for 4Q15. This segment’s therapeutic areas include its Endocrine, Neuroscience, Oncology, and Cardiovascular segments. This franchise’s blockbuster drugs include Humalog, Humulin, and Forteo.

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Humalog

Eli Lilly & Co.’s (LLY) Humalog portfolio consists of different meal-time insulin products used to lower the blood sugar levels in patients with diabetes. Sales for Humalog products rose 3% to $820 million during 4Q16, compared to $799 million for 4Q15.

Humalog’s sales increase includes a 3% increase in Humalog’s US sales to $524.8 million and 3% growth in its international sales to $295.0 million. The increase was driven by higher demand, partially offset by lower realized prices and the negative impact of foreign exchange.

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

Humulin

Eli Lilly’s (LLY) Humulin portfolio consists of concentrated insulin products used to lower the blood sugar levels in patients with type 1 and type 2 diabetes mellitus. These products are used in cases where patients require a higher dosage of insulin.

In 4Q16, sales of Humulin products fell ~1% to $355 million, compared to ~$359 million in 4Q15. This includes a 5% increase in its US sales to $221.8 million and a 9% decrease in its international sales to $133.5 million.

Forteo

Forteo, another blockbuster drug from Eli Lilly & Co., is used in the treatment of osteoporosis. Forteo’s sales rose ~12% to $422.5 million in 4Q16 compared to 4Q15. This includes an ~23% increase in its US sales and a 1% increase in its international sales. The volume growth and favorable impact of foreign exchange substantially offset the decline due to lower realized prices.

Other drugs used to treat osteoporosis include Allergan’s (AGN) Actonel and Roche (RHHBY) subsidiary Genentech’s Boniva.

Investors interested in the pharmaceutical industry can consider the iShares S&P Global Healthcare ETF (IXJ), which invests 1.9% of its portfolio in Eli Lilly & Co. (LLY).

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