Forget Weight Loss Drugs: Here Is Another Reason to Buy Eli Lilly Stock
Written by Prosper Junior Bakiny for The Motley Fool -> Eli Lilly has worked hard to diversify its pipeline. Three new acquisitions will further help decrease its exposure to its core market. Eli Lilly's vast lineup and pipeline are good reasons to consider buying the stock.
Three new acquisitions will further help decrease its exposure to its core market.
Eli Lilly's vast lineup and pipeline are good reasons to consider buying the stock.
Should you buy Eli Lilly (NYSE: LLY) stock? The bulls will argue that the company is dominating the chronic weight management niche of the pharmaceutical industry, which is projected to continue growing rapidly. The bears will point out that this market might not expand as much as some believe, and that, at any rate, plenty more anti-obesity options will earn approval in the next few years and disrupt Eli Lilly's pricing power. In other words, a lot of the conversation revolves around Eli Lilly's work in weight loss, and with good reason.
However, there are other important things to consider before deciding whether to pull the trigger. Notably, Eli Lilly has been expanding and diversifying its pipeline in recent years in ways that could pay rich dividends down the road. Here's what investors should know.
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Eli Lilly's free cash flow has soared over the past three years, partly thanks to its success in the weight-loss space.
The company is using that money to plan for the future. Eli Lilly has been making strategic acquisitions, mostly outside of its core area of expertise. Thanks to these deals, it has bolstered its oncology , immunology, neuroscience, pain management, and other pipeline areas. Recently, it announced three new acquisitions that will grant it access to some promising infectious disease assets.
Eli Lilly is buying out Curevo, LimmaTech Biologics, and Vaccine Company, all three of which are privately held vaccine-focused biotech companies . The first, Curevo, is a corporation developing a promising shingles vaccine that could address the tolerability issues of current options.
