Alzheimer's Disease? It's Not The Time To Forget About This Stock!

Friday, 19 Nov 2021 8:00 AM EST 

Stock mentioned: Eli Lilly (LLY)

One stock that we are actively looking to add to our position is Eli Lilly (LLY). The stock has been on a great run ever since we bought it in the 230s in September, but the near straight-up run has forced us into something we call a high-quality problem: having to sell stocks of strong company. We had to sell in the 260s (a ~15% gain) because it was going up too much too fast, a discipline we have been trying to practice and demonstrate to subscribers.

However, our sale was proven to be strategically correct. Eli Lilly topped out on November 4th, one day before Pfizer announced its COVID-19 antiviral treatment was highly effective. Shares of Eli Lilly fell on the news because it suggested that the company will supply fewer doses of its COVID-19 antibody cocktail next year than previously expected. Since then the stock has been consolidating the big run up since September, still 10% higher than our cost basis. We believe this is an opportunity for us to at least add back the size that we sold at the top, if not buy more. 

While the Pfizer news would eat into Eli Lilly's market shares in the Covid treatment space, we are not in Eli Lilly for the COVID treatment. We are here for the company’s durable growth outlook and the impressive pipelines of Donanemab for Alzheimer’s and Tirzepatide in type 2 diabetes.

Bottom line, Eli Lilly is a best-of-breed healthcare stock you want to own, for an unexplored market in Alzheimer’s treatment. The current opponent to Eli Lilly's Donanemab, which is Biogen's Aduhelm, is being investigated after some recent controversies, and U.S. health insurers are starting to turn their back on this name.