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Is Big Pharma Finally Back?

Eli Lilly CEO John Lechleiter joined the traders on Fast Money. Following is a synopsis of what was said.

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Q: What’s going on with your stock?

A: “In the first 7 months of the year the the Amex Pharmaceutical Index and Lilly have outperformed the S&P,” explains Lechleiter, “so I think there is an element of safety seeking here and if you look at the average dividend yields we’re up about 100 basis points relative to the dividend you see across the broader index.”



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Q: What’s going on with your stock?

A: “In the first 7 months of the year the the Amex Pharmaceutical Index and Lilly have outperformed the S&P,” explains Lechleiter, “so I think there is an element of safety seeking here and if you look at the average dividend yields we’re up about 100 basis points relative to the dividend you see across the broader index.”

Q: What are your expectations for profits from your pipeline?

“The results we reported for Q2 in July featured 21% sales growth from the 9 products that we’ve introduced this decade,” replies Lechleiter. “So as we look ahead we expect to see further growth from new indications, line extensions and just untapped potential of our product portfolio.”

"Beyond that on September 26th we expect to hear back about prasugrel. The trade name will be known as Effient, which is our cardiovascular drug. (Also) we have a pipeline that features a new bone drug and we have a once a week version of our popular diabetes drug Byetta. And last week at the Alzheimer’s meeting we announced that we’re going to be the only company with 2 potential Alzheimer’s treatments in Phase 3 studies.”

Q: Is there any need for acquisition?

”As we look at licensing deals and smaller acquisitions we look at them in a way that brings us some new innovation that can have some benefit for us in the 2011, 2012, and 2013 time period,” says Lechleiter. (In other words, explains Dylan Ratigan, Lilly would be looking to buy into a more advanced pipeline if that was available.)

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Trader disclosure: On Aug 12, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MSFT), (WMT), (UUP), (EMC); Pete Najarian Owns (AAPL),(NVDA), (TSO); Pete Najarian Owns (CSCO) Calls; Jon Najarian Owns (C),(NVDA); Jon Najarian Owns (AAPL) Calls,(CSCO) Calls, (TSO) Calls; Jon Najarian Owns (GLD) Puts, Jon Najarian Owns (EEM) Puts; Terranova Owns (GS), (YHOO), (XLF), (INTC), (SU), (VLO), (SA), (BNI), (RIMM), (KOL), (CME), (GOOG), (IYT), (FCX); Terranova Is Short December 2008 Crude Oil; Terranova Is Long December 2012 Crude Oil;

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)



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