We are adding to our position in this drug stock

Published Mon, Nov 22 20214:37 PM ESTUpdated Fri, Jan 14 202212:15 PM EST

(This article was sent first to members of the CNBC Investing Club with Jim Cramer. To get the real-time updates in your inbox, subscribe here .) Shortly before the closing bell, we will be buying 75 shares of Eli Lilly (LLY) at roughly $261.75. Following the trade, the Charitable Trust will own 325 shares of Eli Lilly. This buy will increase Eli Lilly's weight in the portfolio from about 1.56% to 2.02%. Last Thursday, we told the Investing Club that we were actively looking to add to our position in Eli Lilly . We are making that trade this afternoon. Even though this purchase violates our low average cost basis of around $241, we still believe there is value at these levels with the stock still down roughly $15 from its prior high. We think Eli Lilly is one of the best run companies in the pharmaceutical industry with its diabetes focused portfolio that consistently delivers growth without any major loss of exclusivity risk. But the top-line numbers are only one part of the story. Eli Lilly also has a tremendous track record of expanding margins by driving efficiencies. But what excites us the most about Eli Lilly today is its pipeline. More specifically, Eli Lilly has two assets that CEO David Ricks said last month are "two of the most valuable projects we've ever worked on and maybe the most valuable projects in the industry right now." $10 billion opportunities The two projects Ricks is talking about are donanemab as a treatment for Alzheimer's and tirzepatide in type 2 diabetes. Both assets have the potential to be $10 billion opportunities according to analysts, supporting growth for years to come. Last week in their coverage initiation of Eli Lilly, analysts at BMO Capital called donanemab a potential $10 billion opportunity if access hurdles can be overcome. And in an October research note from JPMorgan, the analysts estimated tirzepatide could be a $10 billion-plus opportunity in type 2 diabetes with potentially multi-billions more in obesity. Along with their third-quarter earnings, Eli Lilly announced its U.S. submission of tirzepatide in type 2 diabetes using a priority review voucher. The company hopes to obtain approval in the United States by the middle of 2022. The same day, Eli Lilly also announced the initiation of a rolling submission for donanemab to the FDA for accelerated approval in early Alzheimer's disease. The company expects regulatory action in the second half of 2022. Not only are there questions about the efficacy of Biogen's aduhelm and its pricing strategy, earlier today we saw a report that said 35% of patients who took the approved dose had brain swelling. That's not great. Bottom line With 2022 shaping up to be a transformative year of approvals and product launches, we think LLY still down from its highs is an oppor