Healthcare Haven

CEOs of big drug companies are rarely, if ever, publicly candid about the price of their stock.

But for the second time in two months Eli Lilly CEO--and soon-to-be Chairman--John Lechleiter has used the word “ludicrous” to describe his stock price.

It made us think of ‘80’s electronics pitchman Crazy Eddie. Like he used to say, “These prices are insaneeeee!”

Clearly Lechleiter thinks shares are undervalued. And so does Pete Najarian. “I like Lilly here,” he tells the gang.

Diabetes Blockbuster

But, whether the stock price is ludicrous or not, CNBC Pharmaceuticals Reporter Mike Huckman tells the traders that he’s intrigued by an announcement from Lilly involving its partners Amylin Pharmaceuticals and Alkermes.

In a nutshell the firms are on track to file for FDA approval of a once-a-week version of their diabetes drug Byetta by the end of the first half of next year. Investor concerns that the timeline would be pushed out have pressured all three stocks recently. Many analysts believe the drug has mega-blockbuster potential.

Also, Eli Lilly has signaled aspirations to get into generic biotech medicines "down the road."


Biotechnology medicines, based on living organisms such as proteins and antibodies, are far more complex and expensive to manufacture and tougher to duplicate than traditional chemical pills. As a result, generic versions will likely not be considered direct substitutes for brand name drugs and are often referred to as biosimilars or follow-on biologics.

Congress has yet to approve a regulatory pathway for generic biologic medicines, but many industry observers believe such a law could be passed as soon as next year, following Europe's lead, as pressure mounts to cut healthcare costs.

Merck said this week it expects to have at least five follow-on biologics in late-stage development by 2012.

Lilly was not quite ready to make such a specific pronouncement, but its biotechnology prowess should grow dramatically with the integration of ImClone.


And on a related note, are you wondering who might be the next head of the FDA? Find out what Mike Huckman is hearing. Watch the video now!

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Trader disclosure: On Dec. 11th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (MSFT), (WMT), (MCD); Pete Najarian Owns (NUE), (FCX); Pete Najarian Owns (DRYS) And Is Short (DRYS) Calls; Pete Najarian Owns (SBUX) Calls; Pete Najarian Owns (UYG) Calls; Pete Najarian Owns (XHB) Calls; Finerman Owns (SRS), (MSFT); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (BBT), (VNO), (SPG), (FCE.A), (COF), (USO)