uploads///Chart  Oncology

Exploring Eli Lilly’s Oncology Franchise in 2016

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Mar. 31 2017, Updated 10:36 a.m. ET

Oncology franchise

Eli Lilly’s (LLY) Human Pharmaceuticals segment also consists of the oncology franchise. Key drugs in this franchise include Alimta, Erbitux, Cyramza, and Portrazza.

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Alimta

Alimta is a chemotherapy drug used in the treatment of patients with advanced non-small cell lung cancer. Alimta’s sales fell ~8% to $2.3 billion in 2016, compared to $2.5 billion in 2015. The fall included a fall of 5.3% to $1.1 billion in the US market and a fall of ~11.1% to $1.2 billion in international markets in 2016.

Alimta lost its market share to competition from other immuno-oncology products in the US market, while its international sales were impacted by the continuous uptake of the generic version at a lower average price. Alimta has competitor drug in Allergan (AGN).

Erbitux

Erbitux is a drug used in the treatment of metastatic colorectal cancer and head and neck cancer. Erbitux’s sales rose 42% to $687.0 million in 2016, compared to ~$485.0 million in 2015. Eli Lilly took back the commercialization rights for Erbitux in North America from Bristol-Myers Squibb (BMY) on October 1, 2015.

Erbitux’s US revenue rose over 50% to $581.1 million in 2016, while its international revenue rose 7.7% to $105.9 million in 2016 following higher demand. Erbitux competes with Roche Holding’s (RHHBY) Avastin and Amgen’s (AMGN) Vectibix.

Other drugs in the oncology franchise

Other drugs in the oncology franchise include Cyramza and Portrazza. Cyramza’s revenue rose 60% in 2016 following a strong uptake in Japan and a launch in European markets. Portrazza reported revenue of ~$14.8 million in 2016.

To divest risk, investors can consider ETFs such as the PowerShares Dynamic Large Growth ETF (PWB), which has invested 3.7% of its portfolio in Eli Lilly.

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