Hard Times at Eli Lilly

Eli Lilly  recently announced layoffs of roughly one-third of its U.S. workforce. In this video, David Williamson explains why this was both necessary and smart. Several of its key drugs will lose patent protection in the next two years, which represents a third of its revenue and Eli Lilly had to do something to compensate. Most likely, Lilly will expand its workforce once several of its new drugs receives FDA approval. In fact, diabetes drugs are looking like an Eli Lilly forte, with six different drugs in various clinical trials.

So if you have faith in Eli Lilly's product pipeline, don't get rattled by the recent layoffs. Better times are ahead, so let its 3.5% dividend help tide you over.


Is Eli Lilly a buy or sell?
With two of its top three drugs poised to lose patent protection this year, is Eli Lilly a dividend stock headed nowhere fast? In a new premium report, The Motley Fool's senior pharmaceuticals analyst breaks down all of Lilly's moving parts, including an in-depth analysis of the company's must-know opportunities and reasons to buy and sell today. To find out more click here to claim your copy today.

The article Hard Times at Eli Lilly originally appeared on Fool.com.

David Williamson owns shares of Pfizer. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Charlie

The above article is incorrect in that you mention the reduction of one-third of its U.S. workforce when in fact it is one -third of it's sales force - big difference

April 13 2013 at 8:24 AM Report abuse rate up rate down Reply