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Eli Lilly and Company: A Strong Buy with Potential Blockbuster Drugs in Pipeline

AInvestWednesday, Jan 3, 2024 4:14 pm ET
1min read

Eli Lilly and Company (LLY) has been making strides in developing drugs for Alzheimers disease and cancer, and has a promising pipeline of diabetes and weight loss medications. The companys forward price-to-earnings ratio of 48.31 is high compared to the S&P 500, but justified by its potential for growth in these markets. 

 Despite the risks involved in developing its Alzheimers drug donanemab, the FDAs lower approval threshold for this disease could lead to a major blockbuster if successful. Lillys cancer drug Verzenio also reported strong data in early-stage breast cancer, giving it the potential to be the first CDK4/6 drug in this multi-billion-dollar market. 

However, the companys next-generation diabetes drugs could lead to cannibalization of current approved drugs, and increasing competition for weight loss drug Zepbound could significantly impact sales over the next three years.

Based on the bulls and bears arguments, it is clear that Lilly has significant potential for growth, but investors should be cautious about the potential risks involved. 

 Overall, Eli Lilly and Company appears to be a strong buy with its promising pipeline of drugs and high potential for growth, but investors should keep an eye on the risks involved in the development of its Alzheimers and diabetes drugs.

$LLY(LLY)

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