Eli Lilly Stock History — The Motley Fool

The company also launched the billion-dollar blockbuster drugs Gemzar, Cialis, Alimta, and Cymbalta in the 1990s and 2000s. After winning FDA approval in 1998, Gemzar went on to become widely used in first-line pancreatic cancer, second-line ovarian cancer, and in metastatic non-small-cell lung cancer, until generic versions became available in 2010. The erectile dysfunction drug Cialis won approval in 2003, and the depression and anti-anxiety drug Cymbalta and the lung cancer drug Alimta won approval in 2004.

Gemzar is no longer an important source of revenue for Eli Lilly, but in 2017 Cialis, Alimta, and Cymbalta contributed $2.3 billion, $2.1 billion, and $757 million to sales, respectively. Cialis could face generic competition in 2018, but Alimta might not have to compete against generics until 2022. Cymbalta lost its patent protection in 2013, so its sales will likely fall further in the coming years.

Insulin bottles and a syringe on a table


Eli Lilly’s business today: Diabetes

Diabetes treatments are the most important part of Eli Lilly’s business. In 2017, insulin and other drugs that help control blood sugar levels in diabetics contributed about $10 billion to the company’s overall $23 billion in sales.

Its best-selling drug is the $2.9 billion-per-year, rapid-acting insulin, Humalog; its fastest-growing diabetes drug is Basaglar, a biosimilar to Sanofi‘s (NYSE:SNY) megablockbuster, long-lasting insulin, Lantus. In the past, Humalog has competed successfully for market share against Novo Nordisk‘s (NYSE:NVO) mealtime insulin, NovoLog; however, Humalog’s patent has expired, and a new biosimilar, Admelog, from Sanofi became available earlier this year.

It remains to be seen whether Admelog can have the same kind of success winning over doctors and patients as Eli Lilly’s Basaglar. Although biosimilars, including Basaglar, are inexact copies of brand-name biologics, they offer similar efficacy, usually at a lower price. Basaglar’s sales increased 402% to $432 million last year; while that’s good news for Eli Lilly, it could indicate that Humalog’s sales could decline markedly because of Admelog.

In addition to Basaglar, Trulicity and Jardiance are also important diabetes drugs. Trulicity, a once-weekly GLP-1 (glucagon-like peptide-1) drug that boosts insulin production, saw its sales grow 119% to $2 billion in 2017. Meanwhile, sales of Jardiance, an SGLT2 (sodium-glucose co-transporter 2) inhibitor that increases glucose excretion in urine, increased 122% in 2017 to $447.5 million.

Eli Lilly’s business today: Cancer

Alimta’s more than $2 billion in annual revenue makes it Eli Lilly’s best-selling cancer drug by far, but the company also generates significant revenue from the cancer drugs Erbitux and Cyramza.

Initially developed by ImClone, which Eli Lilly acquired in 2008, Erbitux is used in colorectal cancer, non-small-cell lung cancer, and head and neck cancer. In 2017, Erbitux revenue totaled $646 million, down 6% year over year. Sales are expected to fall, though, because Erbitux has already lost its patent protection. There aren’t any approved biosimilars to Erbitux on the market in the U.S. yet, but that could change because multiple companies, including Amgen, are working on them.

Unlike Erbitux, Cyramza still has patent exclusivity, and label expansions allowing its use in gastric cancer, non-small-cell lung cancer, and colorectal cancer could help Eli Lilly offset any drop in demand for Erbitux. In 2017, Cyramza’s sales totaled $758 million, up 23% from 2016.

Cyramza will get a little help from Eli Lilly’s recently launched cancer drugs Lartruvo and Verzenio, too. Lartruvo is approved to treat soft-tissue sarcomas (STS) that occur in muscles, fat, tendons, and other soft tissues, and according to the National Cancer Institute, there are 12,310 new cases of STS diagnosed annually. Verzenio treats HR (hormone receptor)-positive, HER2 (human epidermal growth factor receptor 2)-negative advanced or metastatic breast cancer. It has the same mechanism of action as Pfizer‘s (NYSE:PFE) Ibrance, a drug that racked up over $3 billion in sales last year.

Even though it’s early days for these two drugs, they could add meaningfully to Eli Lilly’s sales in the future. In Q1 2018, they generated combined sales of nearly $100 million.

Eli Lilly and Company’s future

Overcoming expiring patents is perhaps the biggest challenge facing Eli Lilly. Threats to Cialis, Cymbalta, Erbitux, and Humalog could put a big dent in Eli Lilly’s top-line performance.

Additionally, the company’s osteoporosis drug Forteo could face generics as soon as next year, putting $1.75 billion in 2017 sales at risk. And generics are already chipping away at sales of its ADHD drug Strattera; in 2017, Strattera’s revenue fell 28% to $618 million.

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