Johnson & Johnson Is Walking Away From a $100 Billion Obesity Market. Could That Actually Make It the Better Long-Term Buy Than Eli Lilly?
Johnson & Johnson doesn't need GLP-1 drugs to grow, and that's good news for long-term investors.
Overview
Eli Lilly (NYSE: LLY) is a Wall Street darling thanks to its success in the GLP-1 weight-loss market. There's a problem here, however, because weight-loss drugs now account for nearly two-thirds of the drug maker's revenues. Johnson & Johnson (NYSE: JNJ) CEO Joaquin Duato isn't interested in being so reliant on just one healthcare niche. In fact, he's steering the company away from the hot GLP-1 sector. Here's why.
GLP-1 weight-loss drugs are a new product category in the pharmaceutical sector. They appear to be miracle drugs, with Eli Lilly a leading company in the space. But Novo Nordisk (NYSE: NVO) is in the mix, too, as are several other companies working on these hot new drugs. If you get caught up in the hype, it almost seems like a drug stock has to have a GLP-1 drug plan, or they aren't even worth looking at as an investment. However, there are a lot of other conditions that are treated with drugs.
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Originally published at www.fool.com.