Ahead of the Bell: Eli Lilly downgraded

NEW YORK - A Credit Suisse analyst downgraded shares of Eli Lilly & Co. Thursday, saying the company's buyout of biotech company ImClone Systems Inc. is expensive and introduces new risks to the stock. Catherine Arnold lowered her rating to "Neutral" from "Outperform" and cut her price target to $42 per share from $56. She said Lilly is relying on ImClone's pipeline of cancer drugs to justify its $6 billion-plus pricetag on ImClone, but many of ImClone's drugs are in very competitive areas, making their prospects for success "very uncertain." "The longer-term questions on growth trump short-term positives, preventing outperformance to peers, while the merits of the ImClone deal could take 4 to 5 years to justify," Arnold wrote. She added that Indianapolis-based Lilly also sacrificed financial flexibility in making the... [read full story]