Eli Lilly & Co. (LLY): Is It Destined for Greatness?

Despite declining Zyprexa sales due to the loss of patent exclusivity, Eli Lilly & Co. (NYSE:LLY)’s net revenue still rose 6% year over year in its latest quarter. However, my fellow Fool Sean Williams notes that the impending patent expiration of blockbuster drugs Cymbalta and Humalog, which represent about 30% of Eli Lilly’s total revenue, will force the company into increased competition with generic drug manufacturers and is quite likely to dent profitability as well. In addition to this, Lilly’s Alimta cancer treatment and its animal health business have not been generating their hoped-for results, either. However, Cialis, Effient, and Strattera held up overall sales growth in the latest quarter.

Lilly recently completed a phase 3 trial of its lung cancer drug necitumumab, which was tested on patients with stage IV metastatic squamous non-small cell lung cancer. Fool contributor Keith Speights notes that the company will make an application for regulatory approval by the end of next year. In the near future, necitumumab should provide a tailwind for Lilly’s revenue growth, as cancer drugs made an estimated $75 billion in global sales during the last year. In addition, Eli Lilly & Co. (NYSE:LLY)’s migraine drug LY2951742 is currently in a mid-stage clinical trial, which is expected to wrap up by the end of October. Lilly and its research partner Boehringer Ingelheim have also submitted a New Drug Application for diabetes drug empagliflozin, which will enable them to compete in an increasingly crowded field.

Putting the pieces together
Today, Eli Lilly has few of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Eli Lilly Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned, and neither does The Motley Fool.

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