Eli Lilly and Company

+14.29%

1. Dependence on Key Products: Eli Lilly’s sales and financial performance are heavily reliant on current and future bestsellers, such as Humalog, Trulicity, and the antidepressant Cymbalta. In the event a drug manufacturer develops an alternative treatment for one or more of these drugs, Eli Lilly could suffer a significant sales decline.

2. Long and Costly Regulatory Approval Process: Developing new drugs is a long and expensive process. The approval of new treatments by regulatory agencies, such as the U.S. Food and Drug Administration, is unknown and uncertain. Thus, new drugs could face legal or regulatory delay, which could affect Eli Lilly’s bottom line.

3. Potentially Volatile Markets: Eli Lilly faces the challenge of operating in potentially volatile markets. Things like raw material costs, foreign exchange rates, interest rates, and regulatory changes can all have an impact on the company’s financial performance.

4. Realized and Unrealized Litigation Losses: Eli Lilly is subject to the risk of litigation and may incur losses associated with product liability and other lawsuits. In addition, there is a potential for undiscovered legal claims against the company, which could also result in losses.

5. Operational Risk: Eli Lilly also faces operational risks, such as manufacturing errors, supply chain disruptions, and cyber security issues. Any of these events could pose a risk to the company’s financial performance.