Lilly's bullish pipeline review can't quell skeptics

Eli Lilly is touting plans to roll out two new medicines a year starting in 2013 as it retains a sharp focus on Alzheimer's disease, diabetes and cancer. But with analysts aiming some sharp barbs at its pipeline, there are some stubborn concerns that the new drugs won't arrive in time to save Lilly from an expected plunge in revenue when Zyprexa loses patent protection in 2011.

To hit its projected drug approval pace, Lilly is relying on the success of the 60 therapies it has in the pipeline. And Lilly says that 10 therapies should be in late-stage trials in 2011. "Our strategy is dependent upon our pipeline of potential medicines," says Steven Paul, president of Lilly Research Laboratories, in a statement. "Today we have the strongest pipeline in our history."

Paul's vision of strength, though, is seen as a significant weakness by a host of analysts, several of whom aren't happy that Lilly's development portfolio includes a large number of mid-stage drugs. "Although Lilly has a growing mid-stage pipeline, these assets remain several years away from the market, leaving the company in the difficult position of needing to heavily invest in its next wave of product opportunities at a time of significant erosion," wrote Chris Schott, an analyst with JPMorgan Securities, in a note to clients.

Lilly's earnings guidance for 2010 didn't do much to inspire confidence either. Its stock slid more than 4 percent in early trading.

- check out Lilly's press release
- here's the story from Bloomberg