David Rex, CEO of Eli Lilly
Scott Millian | CNBC
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Shortly before the closing bell, we will buy 25 shares of Eli Lilly (LLY) Priced at approximately $243.81. After the trade, the Charitable Trust will own 400 shares of Eli Lilly. This purchase will increase Eli Lilly’s weight in the portfolio from approximately 2.28% to 2.43%.
Having avoided the temptation to push for stocks yesterday, we will be making one small buy on Friday afternoon because we believe you should hold your nose and pick something to accept when the broader market is hit hard as it is today. We go with Eli Lilly today as we look at stocks now down ~11% from their 52-week high as an opportunity to expand deeper into this relatively newer position.
We believe Eli Lilly is one of the best managed companies in the pharmaceutical industry with its diabetes focused portfolio continually achieving growth without any significant loss of exclusivity risk. Eli Lilly also has a proven track record of expanding margins.
But what interests us most in this story is the company’s pipeline. More specifically, Eli Lilly is developing two assets that CEO David Ricks previously called “two of the most valuable projects we’ve ever worked on and perhaps the most valuable projects in the industry right now.”
The two projects that Rex has indicated are donanemab as a treatment for Alzheimer’s disease and tirzepatide in type 2 diabetes and obesity. We believe that both drugs will be approved by the Food and Drug Administration next year and represent tremendous long-term opportunities that will support industry-leading growth for years to come.
Back on November 18 at the start of their coverage of Eli Lilly, analysts at BMO Capital described donanemab as a potential $10 billion opportunity if access hurdles can be overcome. And in an October research note from JPMorgan, analysts estimated that tirzepatide could be worth more than $10 billion in type 2 diabetes with an obesity potential in the billions.
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(Long-time Jim Kramer Charitable Trust LLY.)