If you haven't looked at GlaxoSmithKline (GSK 0.77%) and Eli Lilly (LLY 2.66%) in several years, you probably wouldn't recognize them today. Eli Lilly recently spun off its animal health segment, and Glaxo's merging its consumer health business with Pfizer's (PFE -1.30%).

New drug development is a top priority for Glaxo and Lilly, but it's important to remember they're also walking away from some reliable revenue streams. Let's find out which is better positioned to make its big transition work for investors.

Check out the latest Eli Lilly and Glaxo earnings call transcripts.

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The case for GlaxoSmithKline

By the end of the year, Glaxo's Theraflu should join forces with Pfizer's Advil in a joint venture that will be 68% owned by the big British pharma. Investors won't be too sad to see it go. Glaxo's consumer division racked up $10.0 billion in sales last year, which was 2% lower than a year earlier.

Glaxo's stagnant consumer segment was responsible for 25% of total sales last year. As a slimmed-down operation, the company will focus on rebuilding a clinical-stage pipeline that hasn't been terribly productive in recent years.

Glaxo has 16 drugs in clinical-stage testing right now, one of which was acquired in late 2018 for $5.1 billion. Zejula is already generating significant sales as a maintenance treatment for recurrent ovarian cancer patients who have tumors in response to their second or third round of chemotherapy. In a few years, Zejula could begin producing $1 billion in annual sales if approved to treat a larger population of first-line ovarian cancer patients.

Last year, generic competition for Glaxo's former top drug, Advair, dragged sales of the blockbuster 23% lower to $3.1 billion, and the losses will probably accelerate this year. Luckily, annual sales of Ellipta brand inhalers grew 29% to $3.1 billion in 2018, which will help offset this year's Advair losses.

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The case for Eli Lilly

GlaxoSmithKline isn't the only big pharma company willing to pay through the nose for potential new cancer therapies. In January, Eli Lilly spent $8.1 billion to get its hands on some highly targeted new drugs for patients with genetically defined tumors.

The first to earn approval, Vitrakvi, treats patients with any type of cancer, as long as their tumors test positive for a specific mutation. Bayer (BAYR.Y -0.18%) will market Vitrakvi and send Lilly royalties in a low-30s percentage range on U.S. sales and a tiered double-digit percentage of sales everywhere else.

Before the year's over, Lilly will probably send an application to the FDA for LOXO-292. This is a super-specific RET inhibitor that produced a response among 25 of the first 37 lung cancer patients treated in the Libretto study. While that's impressive on its own, you should know that a majority of these patients had already received three or more lines of treatment.

While Lilly's late-stage pipeline gets closer to delivering another new cancer therapy, products approved since 2014 are climbing fast. Trulicity led the charge with a 58% gain in 2018 that raised annual sales of the diabetes treatment to $3.2 billion. Although Trulicity was the largest contributor, combined sales of nine products launched since 2014 rose 60% to $7.2 billion last year.

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The better buy

Glaxo treats dividend raises as more of a bonus than a commitment, and its annual payout hasn't grown in nearly a decade. Glaxo shares offer a nice 5.8% yield at the moment, but you'll probably receive more income over the long run from Eli Lilly despite the meager 2.1% yield it offers now. Lilly bumped up its dividend by 15% in December, which was the sixth consecutive annual increase that the company's delivered.

GlaxoSmithKline expects adjusted earnings per share will contract by 5% to 9% in 2019, and the company doesn't intend to raise its dividend payout above its current level this year. An $8.1 billion acquisition and Lartruvo's recent failure will pressure Eli Lilly's profit growth, but it isn't about to contract. In 2019, Lilly expects adjusted earnings per share to rise just 2% at the top end of its guided range.

Eli Lilly's bottom line and dividend payout will probably continue outpacing Glaxo's for years to come, which makes Lilly the better stock to buy at the moment.