Eli Lilly and Cymbalta

Eli Lilly appears perilously perched on the precipice of a patent cliff. A plummet could result in revenue falling for at least the next two years, and loss of more than 75% of sales within the next 7 years. Worse yet, there’s no parachute of freshly approved drugs to replace this revenue. Lilly’s perch is perhaps the best example of the crisis faced by much of the pharmaceutical industry faces. However, it’s not the end of the world. Even acrophobic investors should take a closer look at patent expiration dates before abandoning hope of possible replacements for this revenue.
Unlike an Abbott or Johnson & Johnson, Eli Lilly is nearly a pure pharmaceutical company, without a significant medical devices or consumer business segment. Eli Lilly has a focus on neuroscience (40.8% of 2010 revenue), endocrinology (26.6%), oncology (16.2%), and cardiovascular drugs (9.4%). Other pharmaceutical segments are 0.9% of revenues, and animal health makes up the remaining 6.0% of revenues. Lilly’s bestselling drug is the schizophrenia treatment Zyprexa, which begins the flood of U.S. patent losses later this year. The next highest seller at $3.5 billion and 15% of revenues is Cymbalta, used to treat depression and fibromyalgia, and is on patent until at least June 2013. http://seekingalpha.com/article/258092-how-eli-lilly-will-face-patent-expirations