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Eli Lilly’s Business Segments in 3Q17

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Business segments

Eli Lilly and Company’s (LLY) products are classified into two business segments: human pharmaceuticals and animal health products.

The above chart shows Eli Lilly’s revenues for the past eight quarters.

Human pharmaceuticals

The human pharmaceuticals segment includes drugs from therapeutic areas such as endocrinology, neuroscience, cardiology, and oncology. The segment contributed ~87% of Eli Lilly’s total revenues in 3Q17. Total sales for human pharmaceuticals rose ~10% to $4.9 billion in the quarter compared to 3Q16. Growth was driven by the strong performances of Basaglar, Jardiance, Lartruvo, Trulicity, and Taltz, and higher realized prices for Forteo, Humulin, and Cialis.

US sales rose 10% in 3Q17, driven by a 4% positive impact of prices and a 6% growth in volumes. Sales from its European markets rose 11%, driven by a 6% growth in sales volumes, a 4% positive impact of foreign exchange, and a marginal increase in price. Sales from the Japanese markets rose ~5%, driven by a 13% increase in volumes, partially offset by the marginal decrease in price as well as an 8% negative impact of foreign exchange.

Elanco: The animal health business

Eli Lilly operates its animal health business through Elanco. In 3Q17, Elanco contributed ~13% of the company’s total revenues. Elanco’s 3Q17 revenues were $740.6 million, a 5% growth compared to 3Q16. Growth was driven by a 6% increase in volumes and a 1% positive impact of foreign exchange, partially offset by a 2% impact of lower realized prices.

The SPDR S&P Pharmaceuticals ETF (XPH) holds 4.3% of its total investments in Eli Lilly (LLY), 4.4% in Merck & Co. (MRK), 4.4% in Perrigo (PRGO), and 4.3% in Johnson & Johnson (JNJ).

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