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Eli Lilly’s Cialis and Other Cardiovascular Products in 1Q17

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Cardiovascular franchise

Eli Lilly and Company’s (LLY) cardiovascular franchise contributes ~15.0% to the company’s total revenues. Key drugs in this segment include Cialis and Effient.

As you can see in the above graph, the major portion of revenues for the cardiovascular franchise is from Cialis sales.

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Cialis

Cialis, a drug for the treatment of erectile dysfunction and benign prostatic hyperplasia, is expected to report revenue growth in 1Q17. The rise is mainly due to an increase in the overall sales volume in US and international markets, supported by higher realized prices. Cialis competes with Viagra from Pfizer (PFE), Stendra from Auxilium Pharmaceuticals (AUXL), and Levitra from GlaxoSmithKline (GSK) and Bayer.

Effient

Effient is an antiplatelet used with aspirin for the prevention of blood clots in arteries and stents, thereby reducing the chances of heart-related events for patients with acute coronary syndrome. Effient is expected to report nearly flat revenues for 1Q17 due to an increase in US sales offset by a fall in international sales due to competition.

To divest the risk, you can consider ETFs such as the iShares US Healthcare ETF (IYH), which holds 2.6% of its total assets in Eli Lilly (LLY). IYH also holds 6.8% of its total assets in Pfizer (PFE), 6.2% in Merck & Co. (MRK), and 3.4% in AbbVie (ABBV).

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