Magazine
#11. Eli Lilly & Co.
Lilly Corporate Center
Indianapolis, IN 46285
Tel: (317) 276-2000
Fax: (317) 277-6579
www.lilly.com
| Headcount | 42,600 | |
| Year Established | 1876 | |
| Pharma Revenues | $13,781 | +6% |
| Total Revenues | $14,645 | +6% |
| Net Income | $1,980 | +9% |
| R&D Budget | $3,026 | +12% |
| Drugs Approved/Launched | |
| Drug | Indication |
| byetta | diabetes |
| Drugs Pending Approval | |
| Drug | Indication |
| arxxant | diabetic retinopathy |
| cymbalta | generalized anxiety disorder |
| Drugs in Phase IIB and Beyond | |
| Drug | Indication |
| prasugrel | acute coronary syndrome |
| enzastaurin | glioblastoma multiforme |
| arzoxifene | osteoporosis, breast cancer prevention |
| inhaled insulin | type 1 and type 2 diabetes |
| pruvanserin | insomnia |
| ly518674 | atherosclerosis |
| naveglitazar | type 2 diabetes |
| factor Xa inhibitor | venous and arterial thrombotic events |
| anti-obesity compound | obesity |
| gamma-secretase inhibitor | Alzheimer’s disease |
| alimta | first-line metastatic breast cancer |
| Early Research Projects | |
| Drug | Indication |
| prasugrel | antiplatelet activity |
| Top Selling Drugs | |||
| Drug | Indication | Sales | (+/- %) |
| zyprexa | schizophrenia | $4,202 | -5% |
| gemzar | pancreatic cancer | $1,335 | 10% |
| humalog | diabetes | $1,198 | 9% |
| evista | postmenopausal osteoporosis | $1,036 | 2% |
| humulin | diabetes | $1,005 | 1% |
| cymbalta | depression, diabetic peripheral neuropathic pain | $680 | n/a |
| strattera | ADHD | $552 | -17% |
Account for 73% of total pharma sales, up from 72% in 2004.
PROFILE
| THE LOWE DOWN Eli Lilly sometimes seems to exist in its own parallel universe (known to beings on this place of existence as “Indianapolis”). They’re making a very good living in some therapeutic areas that others have struggled with (CNS, osteoporosis) and, although they’re not usually thought of as an oncology company, Gemzar sure does pretty well. They’ve also shown an enviable ability to shake off occasional patent challenges, pipeline spasms, and bouts of bad press. Over the years, they’ve shown that they’re willing to vaporize large amounts of money on tough areas like Alzheimer’s and new nuclear receptor-based therapies. It’s probably a good thing that no one has found a way to combine those two—a nuclear receptor ligand program for CNS would be probably enough to bankrupt a good-sized nation. But if their two big near-term projects stay with them—the unpronounceable Arxxant for diabetic complications, and the potential anticoagulant monster prasugrel—Lilly might have the cash to take on whatever it feels like. Makes you wonder why no one else has moved their company to Indiana, doesn’t it? — Derek Lowe |
Lilly is working to improve that productivity through an extensive re-think of its processes. In 2004, the company outsourced its clinical testing operations to Accenture, and Mr. Taurel recently remarked that 20% of the company’s chemists are in China. “We are also outsourcing work that can be done at lower cost and equal—or better—quality,” he wrote in his 2005 letter to shareholders.
How has the R&D initiative played out? Lilly’s R&D expenditures grew 12% in 2005, but that can be attributed to the number of drugs moving into Phase III rather than from an overall R&D initiative. Mr. Taurel has stated that the cost of getting a new molecular entity approved is $1.2 billion, factoring in the costs of other failed products, an eye-popping number considering the Tufts Center for the Study of Drug Development posted that number at $802 million. He contended that Lilly’s strategy is to get down to an $800 million-per-NME cost, and contended that use of biomarkers may help improve go/no-go decisions.
In June 2006, the company decided to close two R&D sites in Hamburg, Germany and Mont-Saint-Guibert, Belgium and a solid dosage manufacturing and packaging facility in Basingstoke, UK. The three sites employ a total of 900 people, most of whom will be laid off. “These proposals are based on the increasingly challenging global pharmaceutical environment as well as Lilly’s current and future business needs,” the company said in a statement. Basingstoke was the company’s first facility outside of the U.S., opening in 1939.
Young Turks
A slide in sales for top product Zyprexa kept Lilly from posting significant growth in 2005 (relative to its immediate neighbors on this list, which posted gains of 10% and 16% respectively), but the company has a strong roster of up-and-comers, and potential blockbusters pending approval. The company’s fastest riser is Cymbalta, which hit $680 million in sales in its first full year and $233 million in 1Q2006 (+118%). With an sNDA pending for generalized anxiety disorder, Cymbalta is on the fast track to blockbuster status. Alimta, another new release, posted $130.1 million in 1Q2006 sales (+39%) in the lung cancer arena, while Forteo (osteoporosis) posted a 90% gain in 1Q2006 to $127.1 million.
An older product may also find its second wind. Evista, which saw a slight rise in 2005 and a 3% drop in 1Q2006, could be ready for a sales surge. In April 2006, Lilly announced that a five-year study showed Evista is as effective at preventing invasive breast cancer in high-risk, postmenopausal women as the current standard of treatment, tamoxifen. Given tamoxifen’s potential for serious side effects, Evista may be able to achieve significant market share if the FDA approves the new indication.
Diabetes News
In April 2005, the company and development partner Amylin Pharmaceuticals received approval for first-in-class Byetta, as both an adjunct and a monotherapy for type 2 diabetes. In June 2006, the companies released results from a two-year study showing that Byetta injection sustained improvements in controlling blood sugar and also reduced body weight by an average of 10 lbs. in patients who couldn’t get adequate control from oral medications.
Market analysts believe Byetta can reach $2.0 billion in annual sales by the end of the decade, but Lilly and Amylin are already facing a hurdle in reaching that goal: they can’t make enough of the stuff. According to reports in Forbes and Bloomberg, the companies have stopped giving out free samples to physicians, suspended advertising, and asked doctors not to start new patients on the drug.
Lilly contends there is no immediate shortage of Byetta, but given the surge in diabetes cases and the weight-loss component of Byetta, it’s easy to imagine that there will be a run on the product. To that end, according to Forbes, Amylin has been working with several contract manufacturers (CP Pharmaceu-ticals and Baxter International) to ensure adequate supplies. Lilly took in $35.8 million in Byetta sales in 1Q2006; total sales of the product were $68.0 million in the quarter. The companies are working with Alkermes to develop a long-acting release version of Byetta. Lilly is also developing an inhaled insulin product with Alkermes.
Lilly filed its NDA for Arxxant, a treatment for diabetes-related vision loss, in February 2006, but made no announcement of that fact. The company mentioned the month of filing in a June statement about Arxxant’s efficacy in cutting the risk of vision problems in diabetics by 41%, but made no other statement except for its 1Q2006 report, where it mentioned that the NDA had been filed “over the last three months.”
The company may be downplaying Arxxant’s status after its August 2005 decision to cut one of the drug’s major indications: diabetic peripheral neuropathy (SDPN). Despite not announcing the filing, the company did open the doors to Arxxant’s regulatory filing for a reporter from the Indianapolis Star, who chronicled the complexities of drug filings and interviewed several members of that team.
Still, we’ll count the Arxxant filing as a plus in Lilly’s ledger. And the company was due for some good news in the diabetes field. After all, in June 2006, Lilly set aside $700 million to settle most of the lawsuits alleging that top seller Zyprexa caused diabetes in users. Some plaintiffs opted out of the settlement and Lilly plans to contest those cases individually.
Lilly is making progress in diabetes, oncology and CNS, three difficult fields. With no significant patent expirations looming, a roster of young products on the rise, and a potential mega-hit with Byetta, Lilly has given its R&D initiative room to breathe. Its sales growth isn’t in the double-digits, but the company may have positioned itself for long-term steady growth while others falter.
