Lou Whiteman

They have some other things in the pipeline, but that's their most promising candidate.

They have a product that's in later-stage trials.

Phase II trial data was very promising.

The main product, it looks like it's going to become the first to market treatment and the most effective for several forms of narcolepsy.

This is estimated to be a $5 billion market.

It has several other treatments, like I mentioned in earlier trials, but that drug is why Lilly's buying it.

The idea is that Lilly's capabilities can help it accelerate its time to market

If it's successful in obtaining FDA approval, which is those milestones you mentioned, in order to get that full $7.8 billion, you would have to get FDA approval for all these forms of narcolepsy.

If that happens, the treatment could be worth several times what Lilly's paying for it.

It's a big if, but that's the goal.

I generally avoid the pharmaceutical industry for the reasons that you mentioned, because only 20% to 30% of the drugs that pass Phase II trials actually come to market.

For me, it hasn't really changed the way I invest personally, but it's definitely something that healthcare investors should take into account.

My short answer is, the market doesn't seem too convinced on the long-term thesis for Whirlpool either.

The stock is down more than 50% from its high.

It's still a profitable business.

It has a 6.9% dividend yield, as we're recording this.

It's well covered by its earnings.

It trades for about 9.3X trailing 12-month earnings and less than 9X forward earnings.

It has about $6.5 billion of debt.

I don't view that as an unreasonable debt load, especially because it steadily declined for the past three years.