Is the Eli Lilly Scare Overdone?

Tracey Ryniec and David Bartosiak, Stock Strategists at Zacks Investment Research, discuss pharmaceutical giant Eli Lilly’s (LLY) recent announcement of its termination of its Phase III trial of its cardiovascular drug, Evacetrapib, after its committee reported that the drug was unlikely to meet its endpoint. Safety of the drug was not at issue.

The company is taking a $90 million charge, or about 5 cents a share, as it ends the trial.

Analysts had hoped that Eli Lily would be able to launch the drug by 2017. While the drug’s market share was unknown, analysts gave it a range from $600 million in sales to several billion in sales per year.

Investors didn’t take the news well. Shares plunged on the day of the announcement even though Eli Lilly has other drugs in the pipeline including for lung cancer and psoriasis. It is in late stage studies for arthritis and breast cancer drugs as well.

Is this termination just a momentary set back?

Tracey examines the fundamental outlook for Eli Lilly and David explores the chart.

Does this stock sell-off create a buying opportunity in the shares? Watch our short video to find out.

Eli Lilly’s: http://www.zacks.com/stock/quote/LLY?cid=CS-YOUTUBE-FT-VID

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