From Nasdaq:

Eli Lilly & Co. (NYSE: LLY) has recently been under scrutiny regarding its debt, cash reserves, and cash burn rate. The company owes over $20 billion in debt, with more than $2 billion due within the next 12 months. Despite concerns about the company’s debt, it’s leveraging this borrowing to make investments in expanding its capabilities for growth.

Eli Lilly’s $2.5 billion in cash reserves are insufficient to cover even a single quarter of its operating expenses, prompting concerns about whether it has enough resources to fund its research and development and business development activities. However, the company’s recent collaboration with Fauna Bio for up to $494 million suggests that it does have the resources to pursue strategic initiatives. Furthermore, its cash outflows are primarily being spent to support capacity expansion and are not hindering its free cash flow.

While Eli Lilly has registered cash outflows, those expenditures are being invested in bolstering its capacity for future revenue growth. As such, the concerns about its financial performance are likely overblown. Overall, the company remains financially healthy and well-positioned to continue its success in diabetes and weight-loss markets.



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