Eli Lilly (LLY) Is Facing Big Challenges

CNBC's Mike Huckman spoke with Fast money traders after his interview with Eli Lilly's (NYSE: LLY)(FREE stock trend analysis) CEO John Lechleither and said that this stock is the only big pharma stock that is down in 2009. When asked if investors should look at biopharma stocks as a defensive play Mike Huckman answered negatively. Eli Lilly (LLY)(FREE stock trend analysis) gave a poor guidance today that was below analyst expectations and market reacted with a sell off. LLY dropped 4.21% and closed at $35.02. Huckman told Fast Money Traders that LLY won't make mega-mergers like other biopharma companies did, but the company will make some strategic acquisitions. He added that Eli Lilly has 25 new drugs that are waiting for approval and that it has a potential to find a new drug that will replace their best selling drug Zyprexa. LLY will lose patent protection for Zyprexa in 2011. Eli Lilly (LLY) partnered with Amylin Pharmaceuticals and Alkermes to develop Byetta - a once weekly version of Byetta that will be first in line to lift Eli Lilly's revenues. Drugs like this one could be the reason for some analysts to recommend LLY as a buy. Mike Huckman thinks that next big catalyst for the sector could be Pfizer (NYSE: PFE)(FREE stock trend analysis) as they could decide to lift dividends soon. After that, things will be quiet for the sector until mid-January and JPMorgan's (NYSE: JPM)(FREE stock trend analysis) health conference. Pete Najarian commented that he believes Eli Lilly will have to make an acquisition, because so many drugs are coming off the patent and they have to do something to neutralize that. Guy Adami thinks that the best play in the sector is Abbot Laboratories (NYSE: ABT)(FREE stock trend analysis) that gained 0.86% today. If you are interested in biopharma sector you can also take a look at biopharma ETFs like PowerShares Dynamic Pharmaceuticals(ETF)(FREE stock trend analysis) (NYSE: PJP)(FREE stock trend analysis), iShares Dow Jones US Pharm Indx (ETF)(FREE stock trend analysis) (NYSE: IHE)(FREE stock trend analysis) or SPDR S&P Pharmaceuticals (ETF)(FREE stock trend analysis) (NYSE: XPH)(FREE stock trend analysis)