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Eli Lilly’s 1Q17 Earnings: Strattera and Other Neuroscience Products

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Neuroscience franchise

Another franchise from Eli Lilly & Co.’s (LLY) Human Pharmaceuticals segment is the neuroscience franchise. Key drugs in this segment include Strattera, Zyprexa, and Cymbalta.

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Strattera

Strattera, a drug for attention-deficit hyperactivity disorder, reported a 4% increase in revenues to $196.2 million in 1Q17, compared to $188.1 million in 1Q16. The drug’s US sales increased 5%, while its international sales increased 3% during 1Q17. Strattera competes with Shire’s (SHPG) Vyvanse and Intuniv, as well as Johnson & Johnson’s (JNJ) Concerta.

Other drugs for neuroscience franchise

Other drugs for the neuroscience franchise include Cymbalta and Zyprexa.

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Cymbalta

Cymbalta is an antidepressant used for the treatment of depression and anxiety, as well as bone and muscle pain. The sales of Cymbalta decreased ~12% to $174.6 million in 1Q17, compared to ~$198.7 million in 1Q16. The drug’s US sales rose 46% to $34.1 million, while its international sales fell 20% to $140.5 million during 1Q17. Cymbalta’s revenues declined due to a loss of exclusivity in Europe and Canada.

Zyprexa

Zyprexa is an antipsychotic drug used in the treatment of conditions such as schizophrenia or bipolar disorder. The sales for Zyprexa decreased ~31% to $147.5 million during 1Q17, compared to $212.8 million for 1Q16. The drug’s US sales decreased 38% to $23.7 million, while its international sales decreased 29% to $123.8 million during 1Q17.

Zyprexa has been exposed to generic competition in Japan since June 2016 due to its patent expiry. For Japanese markets, Zyprexa reported a 52% decline in revenues during 1Q17. Zyprexa has generic competition from Mylan (MYL) and Teva Pharmaceuticals (TEVA).

To divest company-specific risk, investors can consider the iShares Russell Top 200 ETF (IWL), which holds 0.5% of its portfolio in Lilly.

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