We added Eli Lilly (LLY, Financial) to the Fund in the fourth quarter. Lilly’s core focus has historically included diabetes and central nervous system (CNS)/psychiatric treatments. In recent years, the company has diversified its business, adding immunology and oncology products. Margin expansion, driven by product mix shifts and management’s commitment to improving the margin profile, is a key element of our investment thesis. We anticipate stability in Lilly’s diabetes franchise despite new entrants to the market, and we believe the long-term potential for Jardiance, another Lilly product, outside of diabetes is underestimated. We believe Lilly’s immunology franchise could see strong sales growth over the next several years. In our view, the company’s recent oncology acquisitions could continue to bear fruit, and its early-stage pipeline, particularly in oncology, is underestimated.
From Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund fourth-quarter 2019 commentary.
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