Eli Lilly will release earnings shortly. Ponder if the Bear Case Scenario holds hands with a Black Swan.
Lilly has been steadily losing share in the insulin market. Diabetes is reaching epidemic proportions and insulin has a natural growth curve which they are losing. Novo Norsk is better at marketing and its long-lasting products are consider superior.
Lilly generates enough cash flow to cover dividends and capital expenditures until around 2015. The pipeline shrinks right about there and needs a boost immediately if not sooner.
The patent loss on antidepressant drug Cymbalta will have a leveraged impact on the company’s bottom line due to loss of high margins.
George Gutowski writes from a caveat emptor perspective