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We are nibbling on this drug stock amid the broad market sell-off

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David Ricks is CEO of Eli Lilly

Scott Mlyn | CNBC

(This article was originally sent to Jim Cramer and members of CNBC Investing Club. Get the latest updates directly to your email subscribe here.)

Just before the close bell we’ll be purchasing 25 shares Eli Lilly (LLY) Around $243.81 After the trade, 400 shares of Eli Lilly will be owned by the Charitable Trust. This purchase will raise Eli Lilly’s portfolio weight from approximately 2.28% down to 2.43%. 

We will not be buying stocks today, but we have avoided the temptation to do so yesterday. Friday’s small purchase is because we believe you need to keep your eyes open and choose something that is edible when the wider market is suffering as much as we are. As shares are currently at 11% below their 52 week high, we see this as an opportunity to climb deeper into this newer position. 

With its diabetic-focused portfolio, Eli Lilly we believe is among the most well-run pharmaceutical companies. It consistently delivers high growth with minimal loss of exclusivity. Eli Lilly is also known for its strong record of increasing margins.

The company’s future is what we love most about the story.  Eli Lilly has two assets in development that David Ricks, CEO of Eli Lilly said were “two the most important projects we have ever worked on” and possibly the best projects currently being developed by the company.

Ricks mentions donanemab in Alzheimer’s treatment and tirzepatide for type 2 diabetes. The FDA will approve both drugs next year, which we believe will create huge long-term growth opportunities in the industry that will continue to support its leadership for years. 

BMO Capital analysts called donanemab, a potentially $10 billion market opportunity, in their November 18th coverage on Eli Lilly. Access hurdles must be overcome. JPMorgan’s October research note stated that tirzepatide, a treatment for type 2 diabetics and obesity, could have a market of $10 billion to $15 billion. 

CNBC Investing Club now serves as the official residence of my Charitable Trust. You can view every portfolio move and receive my market insights before everyone else. Action Alerts Plus is not affiliated in any way with the Charitable Trust or my writings.

You will be notified by Jim Cramer if you subscribe to CNBC Investing Club. Jim may then make a trade. Jim typically waits for a trade signal to be sent before buying or selling stock from his portfolio of charitable trust stocks. Jim will wait five minutes until the market opens to execute a trade if the trade alert has been sent before the trade is executed. Jim will execute the trade if the trade alert has been issued less than 45 minutes prior to the close of the trading day. Jim can wait 72 hours before execution if the alert is issued after he’s spoken on CNBC TV about a stock. See here for the investing disclaimer.

 (Jim Cramer’s Charitable Trust has been LLY.

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