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 ...

Acadia Pharmaceuticals (ACAD) is a biopharmaceutical company utilizing innovative technology to fuel drug discovery and clinical development of novel treatments for central nervous system (CNS) disorders. The company currently has one proprietary clinical program with pimavanserin (ACP-103) for treatment-induced dysfunction in Parkinson's disease. Other potential indications with pimavanserin include use as an adjunctive therapy for schizophrenia and for sleep maintenance in patients with insomnia.

After the failure of the ACP-104 program and the lack of partnering interest in pimavanserin for schizophrenia, Acadia's stock has been hit hard. Management has undertaken a massive restructuring whereby it reduced headcount by 50% and streamlined its R&D efforts on pimavanserin for Parkinson's disease psychosis (DPD). This is where value still remains, in our view.

Development in schizophrenia remains on hold until after the phase III PDP data in the second half of 2009. Management will continue to work with Allergan (AGN) on two out-licensed

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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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According to the Alzheimer’s Association, approximately 5.2 million Americans are living with Alzheimer’s. Someone develops Alzheimer’s every 71 seconds, and it is the sixth-leading cause of death. To fight the mental, physical and emotional devastation this disease causes individuals, family and friends, Memory Pharmaceuticals Corp. (Nasdaq: MEMY) is focused on developing innovative drugs for the treatment of debilitating CNS disorders that may impair memory and other cognitive functions, including Alzheimer’s disease and schizophrenia.

The company today announced the completion of its phase I multiple ascending dose study of R4996/MEM 63908. The study is the fourth and final study involving health volunteers to determine the efficacy of the nicotinic alpha-7 receptor being developed in collaboration with Roche.

Per the agreement, Memory Pharmaceuticals is responsible for conducting the clinical trials, while Roche is responsible for later-stage development and commercialization.

“We conducted a robust and comprehensive phase 1 program for R4996/MEM 63908, during which

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We are enthusiastic on Alexza Pharmaceuticals, Inc.’s (ALXA) proprietary novel Staccato system that reformulates oral or injectable small molecule compounds into an inhalable aerosol.  The development pipeline is moving forward nicely in our view.  The recent positive phase III data on AZ-004 is a significant milestone for the company.

Alexza has six product candidates in clinical stage trials; including leading candidates AZ-001 for migraine headache pain relief and AZ-004 for acute agitation in patients with schizophrenia. Recent data on both drugs lead us to believe the Staccato system is both safe and highly effective.  By 2011 both AZ-001 and AZ-004 could be on the market, or at least under regulatory review.

At this time we think investors can be patient with Alexza. Data on AZ-001 and AZ-004 looks encouraging, but the company still has to complete phase III trials before we proclaim either a success. The stock took a big hit

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