Eli Lilly and Company (LLY) is a global healthcare company with core products in a number of primary-care pharmaceutical markets. The leading product is Zyprexa, a treatment for schizophrenia and bipolar disorder. The company's other leading drugs include Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Byetta (type-II diabetes), Cialis (erectile dysfunction), Strattera (ADHD), and Alimta (chemotherapy).The company is entering a challenging period, brought about by recent pipeline disappointments, most notably uncertainty surrounding antiplatelet drug Prasugrel. Although we believe the underlying fundamentals of the company remain solid, the recent pipeline setbacks and lack of clarity surrounding prasugrel will likely limit the upside to the stock. We also believe that sales of Zyprexa will begin to decline in 2008 as generic Risperdal eats into market share. We see little movement in the stock until the above issues are addressed. We rate the shares a Hold with ...

Indianapolis-based Eli Lilly and Co.Â’s (LLY) leading product is Zyprexa, a treatment for schizophrenia and bipolar disorder. Zypadhera, the trade name in Europe for the long-acting formula of Zyprexa, was recommended for approval by the Committee for Medicinal Products for Human Use in September. We expect to hear back from E.U. regulators within the next few months.

In April and September, Alimta received approval in combination with cisplatin in the E.U. and U.S. for first-line treatment of non-small cell lung cancer. According to the management, the drug currently holds 20% market share in the second-line indication.

We also expect Lilly to follow the approval of Cymbalta with the launch of a DTC campaign for the fibromyalgia indication, which should help to extend the very strong sales growth of the drug.

Although we believe the underlying fundamentals of the company remain solid, the recent pipeline setbacks and lack of clarity surrounding antiplatelet

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