This spinoff is just getting started

Article Excerpt

Eli Lilly has gained over 25% since it spun off its Elanco animal health business two years ago. The split lets the company concentrate on its main pharmaceutical business. In addition to its impressive portfolio of current products and those in its pipeline, Eli Lilly’s new breakthrough drug to treat patients in the early stages of COVID-19 should spur its long-term growth. Meanwhile, spinoff Elanco has struggled since the split but a new plan to lower its costs and debt sets it up for future growth. It has also attracted the attention of an activist investor. That’s likely to accelerate Elanco’s gains. ELI LILLY & CO. $140 is a buy. The company (New York symbol LLY; Manufacturing sector; Shares outstanding: 956.6 million; Market cap: $133.9 billion; Dividend yield: 2.1%; Takeover Target Rating: Low; www.lilly.com) discovers, develops, manufactures, and markets human pharmaceutical products. Its top-selling drugs include Trulicity and Humalog (diabetes), Alimta (lung cancer), Forteo (osteoporosis), Taltz (psoriasis) and Cialis (erectile dysfunction). On September…