Eli Lilly’s Q2 2018 Earnings: How Did Its Segments Perform?

Business segments

Eli Lilly & Co. (LLY) reports its revenues under two segments—Human Pharmaceuticals and Elanco, its animal health business. The chart below compares the segments’ revenues since the first quarter of 2017.

Eli Lilly’s Q2 2018 Earnings: How Did Its Segments Perform?

Human Pharmaceuticals segment

Eli Lilly’s Human Pharmaceuticals segment includes products from therapeutic areas such as cardiology, endocrinology, neuroscience, and oncology. The Human Pharmaceuticals business generated ~87.5% of Eli Lilly’s total revenues in the second quarter.

The total sales for Human Pharmaceuticals increased ~8.0% YoY (year-over-year) to ~$5.6 billion during the second quarter, compared to the second quarter of 2017. This growth was driven by the strong second-quarter performance of Alimta, Basaglar, Jardiance, Lartruvo, Humalog, Taltz, and Trulicity, as well as several new products.

The segment’s US sales increased 11.0% YoY, driven by a 1.0% favorable impact of prices and ~9.0% growth in volumes. The segment’s sales from its European markets increased 14.0% YoY, driven by 8.0% growth in sales volumes and a 9.0% favorable impact of foreign exchange. These sales were partially offset by a 3.0% negative impact of prices.

The sales from the segment’s Japanese market increased 6.0% YoY, driven by an ~12.0% increase in volumes and a 3.0% favorable impact of foreign exchange. These sales were partially offset by an 8.0% negative impact of prices.

The sales from the Rest of the World markets rose 10.0%, driven by an ~4.0% increase in volumes, a 4.0% favorable impact of prices, and a 2.0% favorable impact of foreign exchange.

Elanco: LLY’s animal health business 

Eli Lilly (LLY) operates its animal health business through Elanco. For the second quarter, Elanco generated ~12.5% of the company’s total revenues.

Elanco reported second-quarter revenues of $792.1 million, a 1.0% increase in YoY revenues compared to the second quarter of 2017. This revenue growth was driven by a 1.0% favorable impact of foreign exchange and a 2.0% favorable impact of higher realized prices. This growth was offset by a 2.0% decrease in volumes.

The iShares Global Healthcare ETF (IXJ) holds 1.8% of its total investments in Eli Lilly (LLY), 1.9% in AstraZeneca (AZN), 2.0% in GlaxoSmithKline (GSK), and 2.9% in AbbVie (ABBV).