Peter:
Your post is full of too much doom and gloom.....
over the years, there were always "concerns" over competition for prozac....Yet, Prozac continues to be one of the most profitable drugs
ever.....Prozac allowed LLY to re-build itself from the ground up....New facilities and extensive research collaborations in lower-tier biotech companies such as Centocor....LLY's pipeline which generated Evista, Zyprexa, ReoPro etc can be directly attributed to Prozac's success....A similar situation is occurring with Warner Lambert (Lipitor).....
Zyprexa will be even better to LLY than was Prozac....Zyprexa will nurture a fruitful pipeline just as Prozac did....While Evista is clearly now deemed a disappointment, So was BMYs Taxol....Analysts hyped Taxol just as they did Evista....and they hated BMY for its disappointment....but now....MANY MANY LIFETIMES LATER ....Analysts are OK with Taxol and BMY has been redeemed in the eyes of the analysts.....Evista May not be a "prozac", but it will do just fine....
Do not put much faith in the STATS spewed forth by the analysts you referred to....There is very little "ANALYSIS" done on wall street these days....(if there was, then LLY would not have run-up so much prior to Evista launch....analysts would have placed realistic expectations on it...Wall Street is dominated by momentum players...who do not hesitate to alter their views ...AKA estimates, projections etc....Analysts change their estimates more often than i change clothes.....their estimates are often wrong despite "guidance" from the company )
Given the recent market sell-off, it is encouraging to note that LLY did not even drop down to the low 60s...this is in marked contrast to MRK, BMY, PFE... LLY will break out of the 60-70 range....and it won't be due to increased reveues etc....it will be due to a rumor about a new drug in its pipeline....rumor of a new application for Evista....positive clinical trial of some sort....
It is these rumors which will sway analysts to yet again change their numbers...Unrealistic dreams of future drugs and revenues will power LLY out of the 60-70 range...
you bought LLY last year at the height of the Evista HYPE... LLY was overvalued back then.....Hold onto it...earnings are catching up to its price...it will treat you well....
Frank |
