A few days ago, my colleague Cory Renauer wrote that there was a big week ahead for Eli Lilly and Company (NYSE:LLY). Cory was right. And we now know the outcomes of several of the big news stories for the drugmaker.

Lilly and partner Incyte (NASDAQ:INCY) announced on Monday that an FDA advisory committee recommended approval of the 2 mg dose of baricitinib in treating rheumatoid arthritis, but not the 4 mg dose. On Tuesday, Lilly reported solid first-quarter results and boosted its full-year revenue and earnings guidance.

With the wind now at its back, is Eli Lilly a smart pick for long-term investors? Let's look at the pros and cons for the big pharma stock.

Die with buy, sell, and hold on sides next to small stack of $100 bills

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Pros

A quick look at Lilly's first-quarter update reveals several major positives for the company: the newer products that have been launched over the past four years. The biggest winner so far is Trulicity. First-quarter sales for the diabetes drug soared 82% year over year. 

Two other newer diabetes products also continue to enjoy strong momentum. Sales for insulin injection Basaglar and type 2 diabetes drug Jardiance jumped 261% and 104%, respectively, in Q1 over the prior-year period. 

Lilly has also become a major player in the immunology area. Plaque psoriasis and psoriatic arthritis drug Taltz could be on its way to becoming a blockbuster. Lilly plans to file for approval of the drug in treating ankylosing spondylitis pending analysis of additional data from late-stage studies. Rheumatoid arthritis drug Olumiant is picking up steam as well, especially with its strong launch in Germany.

The company's newer cancer drugs are also driving growth. Cyramza, which has been approved for treating stomach cancer, gastric cancer, non-small cell lung cancer, and colorectal cancer, could see even more indications in the future. Lilly expects to submit for approval for Cyramza in treating liver cancer within the next few months. The company also has high hopes for recently launched breast cancer drug Verzenio.

There are also a couple of older drugs for which sales continue to grow nicely. Lilly reported double-digit percentage sales growth in the first quarter for insulin product Humalog and type 2 diabetes drug Trajenta.

And even the products that aren't growing still contribute to Lilly's strong free cash flow. The big pharma company uses that cash flow to pay an attractive dividend, which currently yields nearly 3%. 

We can't leave out Lilly's pipeline in the list of pros for the company. An FDA decision on approval for migraine drug galcanezumab is expected in the third quarter of 2018. Galcanezumab is just one reason Lilly CEO Dave Ricks called pain treatment the "next chapter of growth" for the company when he spoke earlier this year at the J.P. Morgan healthcare conference. Lilly also has two other late-stage pain drugs -- lasmiditan and tanezumab.

Lilly and Incyte still think baricitinib can become a significant winner despite an FDA rejection last year. The recent FDA advisory committee positive recommendation for the lower dose of the drug is a good step toward achieving that goal.

Cons

If we could just stop there, buying Lilly would be a slam-dunk. Unfortunately, the company also has several challenges.

Sales are declining for several of Lilly's older products. In the first quarter, sales fell year over year for Cialis, Forteo, Cymbalta, Erbitux, Strattera, and Zyprexa. 

Even the established products that continue to experience sales growth could be in trouble. Lilly's two top-selling products, Humalog and Alimta, face threats from generic rivals.

Lilly's newer drugs aren't necessarily safe, either. Novo Nordisk won FDA approval for diabetes drug Ozempic in December. Market research firm EvaluatePharma expects Ozempic will be the second biggest new drug launch of 2018. Novo Nordisk's late-stage study of Ozempic found the drug had better efficacy than Lilly's Trulicity. 

Some of Lilly's late-stage pipeline candidates could also be questionable at best. Experimental Alzheimer's disease drug solanezumab has already flopped in earlier studies. Lilly's other late-stage Alzheimer's disease candidate, lanabecestat, is a BACE inhibitor -- a type of drug that has also failed in other pharma companies' studies.

Buy Lilly?

In my view, the pros outweigh the cons for Lilly. I think growth for the company's newer drugs should continue to offset declines for the older drugs. I also agree with Lilly CEO Dave Ricks that pain treatment should be an important new growth driver for the company.

But would I put Lilly on my list of stocks to recommend to buy? That's a different story. I think Lilly should continue to be a good choice for income investors. However, I also believe there are plenty of stocks to buy that are likely to generate higher total returns than Lilly will over the next few years. Lilly is a good stock -- but it's just not one of the best stocks, in my view.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.