Vista Partners’ “Number of the Day” today is “$5.3 billion”. We at Vista Partners believe that “$5.3 billion” is particularly interesting as “$5.3 billion” was the amount spent by Indianapolis, IN based Eli Lilly & Co. (LLY-NYSE), a major American pharmaceutical company that was founded in 1876 that discovers, develops, manufactures, and sells pharmaceutical products worldwide, on research-and-development in 2012. The company is continuing with its end run attempt, of high research-and-development spending, while most others in the industry are scaling back R&D expenditures. In an interview with the WSJ published today Lilly’s CEO Dr. John Lechleiter said “I think we’re beginning to see the light at the end of the tunnel”, referring to the huge payoff that the company will receive, if and when one of the many drugs in their pipeline are approved for use. As mentioned earlier, the company’s R&D budget last year was “$5.3 billion”, or 23% of their $22.6 billion revenue, a high rate compared to industry standards.
Lilly’s competitors have cut costs in response pressure from investors who are reacting to decreasing revenues, due mainly to costly failures in R&D and generic competition after patent protection has expired. However, this cost cutting strategy by many drug companies may prove to be somewhat short-sighted, as the prospective gains to be made from new therapies is immense to say the least, and a more long-term perspective seems prudent when investing in the pharmaceutical industry not in the least to say the gain in control of one’s destiny that this approach would seem to bring as well. This is and will be an interesting story to follow…stay tuned in…
Also, remember that Vista Partners is currently also covering two companies developing biotech therapies, Mast Therapeutics (MSTX) and OHR Pharmaceuticals (OHRP). Both of which have interesting pharmaceutical candidates currently in clinical studies. Mast Therapeutics is conducting a phase 3 study for its MST-188 for the treatment of sickle cell disease & Ohr Pharmaceutical’s potential eye drop treatment for the wet form of age-related macular degeneration (Wet-AMD), a leading cause of vision loss and blindness in the elderly population, affecting over 1.75 million patients in the United States alone, is currently in a phase 2 study. To learn more about these companies one may visit company dedicated pages that include videos, company filings, their latest news and a FREE Report under the Coverage section at the Vista Partners’ website www.vistapglobal.com.
Lastly, please note that the FREE Vista Partners’ Monthly Macroeconomic Newsletter for October was published recently. Each monthly newsletter from Vista contains macroeconomic thoughts from Principal Analyst Ross Silver, investment considerations, monthly highlights of each covered company (many healthcare related) and other broad based commentary. Anyone can receive the Vista Partners’ Newsletter automatically via email each month for FREE by by taking a few seconds to sign in one time to the Vista Partners website at www.vistapglobal.com. Currently you can download the current edition under the Newsletter Section of the Vista Partners’ website. Stay tuned in with Vista daily…
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