Headcount: 44,000
Revenues: $34,124 (+28%)
Net Income: $5,240 (-16%)
R&D Expenses: $9,313 (+30%)

Burgeoning GLP-1 demand has Lilly investing billions in ambitious expansions to support its diabetes and obesity portfolio, adding capacity to manufacture APIs and bolstering its global parenteral product and device manufacturing network.

Lilly’s highlights for the year included key regulatory approvals and significant business development initiatives, underscored by new flagship GLP-1 products Mounjaro and Zepbound. For the year, growth from Mounjaro, Verzenio, Zepbound, Jardiance, and Taltz, partially offset declines in Alimta and Trulicity.

Meanwhile, key acquisitions and alliances remain largely focused on cardiometabolic diseases, with additional investments dedicated to immunology, oncology, and neuroscience.

Pipeline Highlights

Significant pipeline progress included FDA approvals for Zepbound in adults with obesity or overweight with weight-related comorbidities, and Jaypirca under the Accelerated Approval for chronic lymphocytic leukemia or small lymphocytic lymphoma. Additionally, at press time, Lilly received FDA approval for Kisunla (donanemab once-monthly injection) a treatment for early symptomatic Alzheimer’s disease (AD), which includes those with mild cognitive impairment as well as the mild dementia stage of AD. Kisunla is the first and only amyloid plaque-targeting therapy that can help the body remove the excessive buildup of amyloid plaques and slow the decline that may diminish memory.

Additionally, the company achieved positive results from SYNERGY-NASH, a Phase 2 study of tirzepatide in adults with nonalcoholic steatohepatitis (NASH), also known as metabolic dysfunction-associated steatohepatitis (MASH).

In November, Lilly’s Zepbound (tirzepatide) injection, became the first obesity treatment that activates both GIP (glucose-dependent insulinotropic polypeptide) and GLP-1 (glucagon-like peptide-1) hormone receptors. Zepbound was approved for adults with obesity or those who are overweight and have weight-related medical problems such as hypertension, dyslipidemia, type 2 diabetes mellitus, obstructive sleep apnea or cardiovascular disease.

The approval was based on Phase 3 results in which people taking Zepbound experienced substantial weight loss compared with placebo at 72 weeks. At the highest dose (15 mg), people taking Zepbound lost on average 48 lbs, while at the lowest dose (5 mg), people lost on average 34 lbs. (compared to 7 lbs. on placebo). Zepbound became available in the U.S. in December, and had sales of $175.8 million.

Additionally, the FDA approved Jaypirca (pirtobrutinib) for the treatment of adults with chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL) who have received at least two prior lines of therapy, based on overall response rate and duration of response.

Jaypirca, the first and only FDA-approved non-covalent (reversible) BTK inhibitor, is a highly selective kinase inhibitor that can extend the benefit of targeting the BTK pathway in previously treated CLL/SLL patients.

Becoming Lilly’s first approved treatment for a type of inflammatory bowel disease, the FDA approved Omvoh (mirikizumab-mrkz) infusion/injection, the first and only interleukin-23p19 (IL-23p19) antagonist for the treatment of moderately to severely active ulcerative colitis. Omvoh achieved primary and key secondary endpoints, including sustained clinical remission in pivotal trials

Investment Projects

Lilly has experienced and continues to expect delays fulfilling orders of certain Mounjaro doses due to significant demand, as such the company is undertaking ambitious expansions to bolster production.

Since 2020, Lilly has committed more than $18 billion to build, upgrade and acquire facilities in the U.S. and Europe. Recently, Lilly increased its manufacturing investment to $9 billion at its newest Indiana site to boost API production for Tirzepatide and pipeline medicines, making it the largest investment in active pharmaceutical ingredient manufacturing of synthetic medicines in U.S. history.

Separately, the company has invested an additional $1.2 billion to update existing manufacturing facilities in Indianapolis and recently acquired an injectable manufacturing facility in Pleasant Prairie, WI, from Nexus Pharmaceuticals.

Meanwhile, in Germany, Lilly plans to build a new $2.5 billion high-tech manufacturing site in Alzey, Rhineland-Palatinate, to expand its global parenteral product and device manufacturing network to support its diabetes and obesity portfolio. The site will bolster Lilly’s incretin supply when operational beginning in 2027.

With the planned manufacturing facility in Alzey, Lilly will operate a total of six manufacturing sites in Europe, including one in nearby Fegersheim, France.

Finally, at Lilly’s next-generation biopharmaceutical manufacturing facility in Limerick, Ireland, the company selected ABEC to support Basis of Design engineering, which provided multiple Custom Single Run (CSR) single-use systems for the facility’s upstream and downstream processes. The CSR systems allow Lilly to leverage ABEC’s extensive process and operations experience from other plants in their network, supporting rapid startup, high productivity, seamless technology transfer, and regulatory compliance. The CSR Bioreactors’ mixing and mass transfer performance will enable Lilly’s high-density cell culture processes to support large scale harvest and purification.

Acquisitions

Several acquisitions this past year add small molecules, radioligand therapies, and cell therapies in the areas of immunology, oncology and cardiometabolic diseases.

The acquisition of POINT Biopharma for approximately $1.4 billion, adds a pipeline of radioligand therapies in development for the treatment of cancer. Radioligand therapy can enable the precise targeting of cancer by linking a radioisotope to a targeting molecule that delivers radiation directly to cancer cells, enabling significant anti-tumor efficacy while limiting the impact to healthy tissue.

POINT’s lead programs in late-phase development include PNT20021, a prostate-specific membrane antigen targeted radioligand therapy in development for metastatic castration-resistant prostate cancer (mCRPC) after progression on hormonal treatment, and PNT20031, a somatostatin receptor targeted radioligand therapy in development for the treatment of gastroenteropancreatic neuroendocrine tumors. The company operates a 180,000-sq.-ft. radiopharmaceutical manufacturing campus in Indianapolis, as well as a radiopharmaceutical R&D center in Toronto.

The acquisition of Versanis Bio in a transaction valued at up to $1.9 billion, adds assets for cardiometabolic diseases. Versanis’ lead candidate bimagrumab is a monoclonal antibody currently being assessed in a Phase 2b study alone and in combination with semaglutide in adults who are overweight or obese. Combining incretins with bimagrumab has the potential to further reduce fat mass while preserving muscle mass and may lead to better outcomes.

Additionally, Lilly acquired Sigilon Therapeutics for approximately $34.6 million. Since 2018, Lilly and Sigilon have worked together to develop encapsulated cell therapies, including SIG-002, for the treatment of type 1 diabetes. The goal of these therapies is to free patients from constant disease management by sensing blood glucose levels, restoring insulin production and releasing it over the long term.

Lastly, an agreement to acquire DICE Therapeutics for approximately $2.4 billion, will add oral therapeutic candidates to treat chronic diseases in immunology. Dice’s DELSCAPE platform is designed to discover selective oral small molecules with the potential to modulate protein-protein interactions as effectively as systemic biologics.

Its lead therapeutic candidates are oral antagonists of the pro-inflammatory signaling molecule, IL-17, which is a validated drug target implicated in a variety of immunology indications. DICE is also developing oral therapeutic candidates for the treatment of inflammatory bowel disease.

Headcount: 39,000
Revenues: $28,541 (+1%)
Net Income: $6,245 (+12%)
R&D: $7,191 (+4%)

Lilly demonstrated enough growth in 2022 to offset pricing pressures, generic competition, and declines for COVID-19 antibodies, achieving pipeline progress that included the launch of Mounjaro in type 2 diabetes. Among the more successful drug launches in recent times, Mounjaro seems poised for blockbuster status, with momentum increasing as approval for weight loss in obesity is anticipated later this year. Mounjaro sales reached $482.5 million since its launch in June 2022.

Top growth drivers include flagship diabetes drugs Trulicity, which saw sales of $7.4 billion for the year, up 15%, and Jardiance with sales up 39% to $2.1 billion. Meanwhile breast cancer drug Verzenio saw sales up 84% to $2.5 billion, driven by increased demand. This March, Verzenio received an expanded indication as an additional treatment in high-risk early breast cancer, which is expected to further drive growth.

These high growth products helped offset declines for top sellers Humalog and Humilin, which saw sales drop 16% and 17%, respectively. Meanwhile, revenue from COVID-19 antibodies was down 10% for the year, dropped 96% in the fourth quarter, and 100% in 1Q23. This includes sales for bamlanivimab, bamlanivimab and etesevimab administered together, and bebtelovimab. In December, the FDA pulled authorization for bebtelovimab, citing it’s not expected to neutralize the dominant subvariants of Omicron at the time.

In addition to a record-breaking $3.7 billion investment in its Indiana manufacturing facilities, Lilly invested in several notable assets through acquisitions with prospects targeting oral drugs to treat autoimmune disorders, cell therapies, including SIG-002, to treat type 1 diabetes, and gene therapies aimed at addressing hearing loss.

Facilities

Over the course of the year, Lilly made significant investments in facilities to support increased demand for its diabetes products with a $3.7 billion investment in manufacturing facilities in Indiana and $450 million in its manufacturing site in Research Triangle Park, NC.

The additional $1.6 billion investment at its two new manufacturing sites within LEAP Innovation Park in Boone County, IN bring the company’s total commitment to $3.7 billion and as many as 700 new jobs, representing the largest manufacturing investment at a single location in the company’s history and will incorporate advanced technology to create innovative medicines.

The expansion at the Research Triangle Park facility will create at least 100 new jobs to expand its manufacturing capacity and includes additional parenteral filling, device assembly and packaging capacity to support an increased demand for Lilly’s incretin products that treat diabetes. Since 2020, Lilly has committed roughly $4 billion in new manufacturing facilities in North Carolina, including $1.7 billion for the development and expansion of its site at Research Triangle Park. This expansion will play a key role in delivering supply of existing Lilly medications, while preparing to manufacture its next generation of medicines.

Back in June, Lilly had announced its plans to expand its manufacturing footprint in Indiana with a $2.1 billion investment in two new manufacturing sites at Indiana’s LEAP District. These new facilities will expand Lilly’s manufacturing network for active ingredients and new therapeutic modalities, such as genetic medicines.

Acquisitions

Year to date, three acquisitions add promising technology for potential oral immune therapies, and potentially curative cell and gene therapies. Recently, Lilly entered an agreement to acquire oral immune drug developer DICE Therapeutics, Inc., for approximately $2.4 billion. Dice leverages its DELSCAPE technology platform to develop oral therapeutics to treat chronic diseases in immunology. The platform is designed to discover selective oral small molecules with the potential to modulate protein-protein interactions as effectively as systemic biologics. Its lead therapeutic candidates are oral antagonists of the pro-inflammatory signaling molecule, IL-17, which is a validated drug target implicated in a variety of immunology indications. DICE is also developing oral therapeutic candidates targeting the integrin α4ß7 for the treatment of inflammatory bowel disease.

At press time, Lilly entered announced an agreement to acquire Sigilon Therapeutics, Inc., a biopharmaceutical company looking to develop functional cures for a broad range of acute and chronic diseases, for approximately $34.6 million, plus a potential consideration of up to approximately $309.6 million. The companies have been working together since 2018 to develop encapsulated cell therapies, including SIG-002, for the treatment of type 1 diabetes. The goal of these therapies is to ease disease management by sensing blood glucose levels, restoring insulin production and releasing it over the long term.

Finally, for $487 million, Lilly acquired Akouos, Inc., a precision genetic medicine company developing a portfolio of adeno-associated viral gene therapies for the treatment of inner ear conditions. Akouos brings expertise across otology, inner ear drug delivery, and gene therapy with the potential to address hearing loss. Its lead product candidate, AK-OTOF, is a gene therapy for the treatment of hearing loss due to mutations in the otoferlin gene (OTOF). Additional pipeline programs span multiple inner ear conditions.

Alliances

Efforts are underway to further enhance its capabilities in diabetes and metabolic diseases with alliances with Sosei Heptares and Nimbus Therapeutics. Lilly paid Sosei Heptares $37 million upfront to develop small molecules that modulate G protein-coupled receptor (GPCR) targets in diabetes and metabolic diseases. Sosei is eligible to receive as much as $694 million in development and commercial milestones, as well as royalties. The collaboration leverages Sosei’s StaR platform, which designs GPCRs by engineering a small number of single point mutations along with Lilly’s expertise in diabetes and metabolic diseases.

Additionally, a collaboration and licensing agreement with Nimbus Therapeutics for potential therapeutics for metabolic diseases, has a potential value of $496 million. The companies will work to develop novel targeted therapies designed to activate a specific isoform of AMPK, which is considered a high-value target in this indication due to its role in glucose, lipid metabolism, and inflammation, applying Nimbus’ computational drug discovery engine.

Meanwhile, a drug design collaboration with Schrödinger, a computational technology aims to address an undisclosed target. Schrödinger will receive as much as $425 million in discovery, development and commercial milestones and will be responsible for discovery and optimization of small molecule compounds. Once complete, Lilly will take over further development and commercialization.

Key approvals

Key among Lilly’s approvals is potential blockbuster Mounjaro (tirzepatide) injection, the first and only GIP and GLP-1 receptor agonist for the treatment of adults with type 2 diabetes. Mounjaro delivered superior A1C reductions in the phase 3 SURPASS clinical trials, and although it’s not indicated for weight loss, Mounjaro led to significantly greater weight reductions and represents the first new class of diabetes medicines in nearly a decade with a surge in demand. It’s expected to win regulatory approval for obesity later this year.

Additionally, Lilly’s Olumiant became the first FDA-approved treatment for Alopecia Areata (AA). Lilly and partner Incyte received approval for the once-daily pill based on Lilly’s BRAVE-AA1 and BRAVE-AA2 trials, the largest Phase 3 clinical program completed to date, evaluating the efficacy and safety of Olumiant in 1,200 patients with severe AA.

Across the studies, 17-22% of patients taking Olumiant 2-mg/day and 32-35% of patients taking 4-mg/day achieved 80% or more scalp hair coverage, compared to 3-5% taking placebo. Moreover, 24-26% of patients taking the 4-mg dose achieved 90% or more hair coverage, compared to 1-4% of patients taking placebo.

Headcount: 36,190
Revenues: $28,318 (+15%)
Net Income: $5,582 (-10%)
R&D: $7,026 (+15%)

TOP SELLING DRUGS

In an eventful and productive year for Lilly, the company won several significant approvals, announced investments of $4.3 billion in manufacturing capacity, and acquired biotech Protomer Technologies for $1 billion. Lilly also received authorizations and orders for its Covid-19 antibodies, but the FDA later limited their use.

Lilly’s key growth products, Trulicity, Taltz, Verzenio, Jardiance, Olumiant, Emgality, Retevmo, Cyramza and Tyvyt, represented an impressive 61% of total revenue in the fourth quarter of 2021, excluding revenue from Covid-19 antibodies. For the year, worldwide revenue growth of 15% was driven by a 16 percent increase in volume boosted by worldwide revenues of $2.2 billion from Covid-19 antibodies.

Sales of top seller Trulicity were up 28% to $6.5 billion, while Humalog revenue was down 7% to $2.5 billion, primarily as a result of lower prices in the U.S., and with competition abound, the company expects a continued price decline. Taltz generated worldwide sales of $2.2 billion, an increase of 24%, while entry of generic competition for lung cancer treatment Alimta ate away at sales, which were down 33%.

Meanwhile, increased demand for breast cancer drug Verzenio saw sales increase 48%, generating worldwide revenues of $1.4 billion. With recent approvals, Verzenio now stands to compete with Pfizer’s market-leading Ibrance. In England the drug won backing from England’s National Institute for Health and Care Excellence expanding eligibility for routine coverage as a post-surgery treatment for early breast cancer at high risk of recurrence.

Olumiant (baricitinib) generated sales of $1.1 billion, an increase of 75%, partially driven by its use for the treatment of hospitalized Covid-19 patients. Meanwhile, Lilly and Incyte recently received approval from the FDA for Olumiant, as a once-daily pill to treat adults with severe alopecia areata (AA), becoming the first FDA-approved treatment for this condition. In the largest Phase 3 clinical program in AA completed to date, at 36 weeks 17-22% of patients taking Olumiant 2-mg and 32-35% of patients taking 4-mg achieved 80% or more scalp hair coverage, compared to 3-5% taking placebo.

For the year, the Lilly’s Tyvyt revenue was up 35% to $418.1 million. The cancer drug Tyvyt is part of the company’s alliance with Innovent Biologics under which Lilly reports total sales with payments made to Innovent. In China, the PD-1 immunoglobulin G4 monoclonal antibody known as sintilimab, is approved for six cancer indications. The companies recently submitted an application for Tyvyt in first-line non-small cell lung cancer to the FDA, setting up the arrival of the first China-made PD-1 inhibitor in the U.S.

Corporate investments

Lilly announced substantial investments to increase its manufacturing capacity for current and future medicines. Lilly plans to invest more than $500 million in a new site in Limerick, Ireland to expand the company’s manufacturing network for biologic active ingredients. Lilly also plans to invest more than $1 billion in a new site in Concord, NC to manufacture parenteral products and devices. Most recently, in May Lilly announced plans to expand its manufacturing footprint in Indiana with an investment of $2.1 billion in two new manufacturing sites for active ingredients and new therapeutic modalities, such as genetic medicines.

Over the past eight years, Lilly has delivered 17 new medicines, including Mounjaro (tirzepatide) for the treatment of type 2 diabetes, and aims to introduce four potential new medicines in the next two years. These new sites will support increased demand for existing products as well as support pipeline advances.

This past February, the company launched the Lilly Institute for Genetic Medicine, investing approximately $700 million to establish a state-of-the-art facility at a new site in the Boston. This investment – part of the company’s strategy to advance RNA based therapeutics – builds on the 2020 acquisition and expansion of Prevail Therapeutics, a NY-based gene therapy developer. Researchers in Boston and New York will leverage RNA and DNA-based technologies in an effort to develop genetic medicines with the potential to treat or prevent diseases.

Genetic medicines currently account for more than 20 percent of Lilly’s diabetes, immunology, and central nervous system research portfolio. Over the next five years, Lilly projects the Boston site will grow from 120 to more than 250 research biologists, chemists, data scientists and other experts in genetic medicine, while the New York site will grow to include up to 200 scientists.

Furthermore, in a transaction valued at more than $1 billion, Lilly acquired Protomer Technologies, a private biotech company leveraging its peptide- and protein-engineering platform to identify and synthesize molecules that can sense glucose or other endogenous modulators of protein activity. Protomer’s next-generation protein therapeutics can sense molecular activators in the body, and its chemical biology-based platform enables the development of therapeutic peptides and proteins with tunable activity that can be controlled using small molecules. Protomer’s portfolio of therapeutic candidates include glucose-responsive insulins that can sense sugar levels in the blood and automatically activate as needed throughout the day.

Alliances

Through several alliances, Lilly gained access to novel technologies for the development of therapies in oncology, neurologic indications, and metabolic disorders. Under a strategic collaboration with Foghorn Therapeutics Inc. for novel oncology targets, Lilly gains access to Foghorn’s Gene Traffic Control platform. Lilly will pay $300 million upfront and will invest $80 million in Foghorn.

A research pact with Entos Pharmaceuticals Inc. aims to support the development of therapies in multiple neurologic indications. Here Lilly gains exclusive rights to Entos’ Fusogenix nucleic acid delivery technology to develop products targeting the central and peripheral nervous system. This technology provides an opportunity for Lilly to access a novel delivery platform technology with the potential to solve a key delivery challenge for many nucleic acid therapeutic modalities.

Finally, another strategic alliance with QILU Regor Therapeutics Inc. aims to discover and develop novel therapies for metabolic disorders. Lilly will have a license to select Regor intellectual property with an option to extend the license. The agreement will allow each company to leverage both parties’ existing compounds and technologies globally.

Regulatory updates

Lilly won several key approvals from the FDA, as well as authorizations for Covid. Most recently, the FDA issued an Emergency Use Authorization for bebtelovimab, an antibody that demonstrates neutralization against the Omicron variant. Bebtelovimab can now be used for the treatment of mild-to-moderate Covid-19 in adults and pediatric patients 12 and older, and those at high risk for progression to severe Covid-19. Pseudovirus and authentic virus testing demonstrate that bebtelovimab retains full neutralizing activity against Omicron and all other known variants of interest and concern, including BA.2.

Additionally, the FDA expanded the Emergency Use Authorization for bamlanivimab and etesevimab administered together to include certain high-risk pediatric patients for the treatment of mild to moderate Covid-19 as well as post-exposure prophylaxis. The antibody combo was previously authorized by the FDA as the first and only neutralizing antibody therapy for emergency use in Covid-19 patients. However, the FDA has since limited authorized use of bamlanivimab and etesevimab due to the high frequency of the Omicron variant, noting the treatment is unlikely to be active against the omicron variant.

This past February, the U.S. Government signed a purchase agreement for 614,000 additional doses of Lilly’s bamlanivimab and etesevimab for the treatment or post-exposure prevention of Covid-19 for a total of $1.3 billion. There were approximately 435,000 doses delivered in fourth-quarter 2021 with most of the remaining doses already shipped in January 2022.

In a big win for Lilly, Verzenio (abemaciclib) in combination with endocrine therapy was approved for the adjuvant treatment of patients with hormone receptor-positive (HR+), human epidermal growth factor receptor 2-negative (HER2-), node-positive, early breast cancer at high risk of recurrence and a Ki-67 score of ≥20% as determined by an FDA-approved test. Ki-67 is a marker of cellular proliferation. Verzenio is the first and only CDK4/6 inhibitor approved for this patient population.

Also noteworthy, Lilly and partner Boehringer won approval for Jardiance (empagliflozin) to reduce the risk of cardiovascular death and hospitalization in heart failure. The drug can now help address a significant unmet need for the approximately three million adults in the U.S. with preserved ejection fraction, a form of heart failure that has very limited treatment options.

Regulatory authorities have accepted Lilly’s New Drug Application in the U.S. and Japan, and Marketing Authorization Application in the EU, respectively, for tirzepatide for the treatment of type 2 diabetes. Lilly also submitted tirzepatide to six additional markets. Lilly initiated a rolling submission to the FDA for pirtobrutinib, seeking accelerated approval in mantle cell lymphoma, with expectations to complete the submission in 2022.

Headcount: 34,000
Revenues: $24,540 (+10%)
Earnings: $6,194 (-26%)
R&D: $6,086 (+9%)

TOP SELLING DRUGS

Lilly’s notable achievements this past year include the recent Emergency Use Authorization from the FDA for both bamlanivimab and baricitinib for the treatment of COVID-19, as well as positive results for donanemab in Alzheimer’s disease, tirzepatide in type 2 diabetes, and LOXO-305 for cancer.

Key products contributing to growth for the year include Trulicity, Taltz, Emgality, Verzenio, Jardiance, Cyramza, Baqsimi, Retevmo, Olumiant and Basaglar, as well as the inclusion of $871.2 million in revenue for bamlanivimab, which partially offset declines for Cialis, Tradjenta and Forteo. Meanwhile, Humalog revenue was down 7% to $2.6 billion driven by lower prices in the U.S., partially offset by higher demand. Research and development expenses were up 9% to $6.1 billion, or 25 percent of revenue, due to approximately $450 million of development expenses for COVID-19 antibody therapies and baricitinib.

Significantly, two investments expanded Lilly’s pipeline in neurodegenerative diseases with disease-modifying therapeutics. In a transaction valued at approximately $880 million, based on the first regulatory approval, Lilly acquired Prevail Therapeutics, a biotechnology company developing potentially disease-modifying AAV9-based gene therapies for neurodegenerative diseases. Lilly gains a new modality for drug discovery and development, along with Prevail’s portfolio of clinical and preclinical assets. Prevail’s lead gene therapies are PR001 for Parkinson’s disease with GBA1 mutations and neuronopathic Gaucher disease, and PR006 for frontotemporal dementia with GRN mutations. Preclinical assets include potential gene therapies for Alzheimer’s, Parkinson’s disease, amyotrophic lateral sclerosis (ALS).

Also, for $135 million upfront and as much as $1.2 billion in additional future payments, Lilly acquired Disarm Therapeutics, a biotechnology company creating a new class of disease-modifying therapeutics for axonal degeneration, a common, yet unaddressed pathology in a broad range of neurological diseases. Disarm discovered potent SARM1 inhibitors and is advancing them in preclinical development, with the goal of delivering breakthrough treatments for peripheral neuropathy and other neurological diseases such as ALS and multiple sclerosis. SARM1 protein is a central driver of axonal degeneration and Disarm’s SARM1 inhibitors are designed to directly prevent the loss of axons.

R&D/COVID Efforts
After investing upwards of $8 billion in 2020 in business development, capital expenditures and R&D initiatives, Lilly achieved several development breakthroughs. Among them, Donanemab, an investigational drug for Alzheimer’s disease, demonstrated significant slowing of clinical decline in a Phase 2 study, and studies of LOXO-305 in oncology, tirzepatide in type 2 diabetes and Verzenio in early breast cancer, generated promising data.

Additionally, top seller Trulicity was approved for cardiovascular event reduction, Retevmo launched for non-small cell lung cancer and thyroid cancers, and Lyumjev rapid-acting insulin launched for diabetes. Also, new indications and line extensions were approved for Taltz, Cyramza and Olumiant, and Jardiance was submitted for heart failure for reduced ejection fraction.

Advancing efforts in the fight against COVID-19, in February, the U.S. FDA granted Emergency Use Authorization (EUA) for bamlanivimab for the treatment of mild to moderate COVID-19 in adults and children 12 years and older who are at high risk for progressing to severe COVID-19 and/or hospitalization. Lilly subsequently developed bamlanivimab and etesevimab for administration together in order to address the potential challenge of SARS-CoV-2 variants likely to resist treatment with either monoclonal antibody used alone. Results from a Phase 3 trial showed that bamlanivimab and etesevimab together significantly reduced COVID-19-related hospitalizations and deaths in high-risk patients by 70%, meeting the primary endpoint of the trial.

A global antibody manufacturing collaboration with Amgen aims to significantly increase the supply capacity available for Lilly’s COVID-19 therapies bamlanivimab and etesevimab. Through the collaboration, the two companies will have the ability to quickly scale up production and serve more patients globally.

Additionally, Lilly is collaborating with Vir Biotechnology and GlaxoSmithKline to evaluate a combination of two COVID-19 therapies, bamlanivimab and VIR-7831, in low-risk patients with mild to moderate COVID-19.

Previously, in November, the FDA granted Emergency Use Authorization for Lilly’s Olumiant (baricitinib), a janus kinase inhibitor, to be used in combination with Gilead’s antiviral remdesivir in hospitalized adult and pediatric patients two years and older with suspected or confirmed COVID-19 who require supplemental oxygen or mechanical ventilation.

In other pipeline advances, the FDA accepted a supplemental New Drug Application for Jardiance, which is being investigated as a potential new treatment to reduce the risk of cardiovascular death and hospitalization in heart failure and to slow kidney function decline in chronic heart failure with reduced ejection fraction.

Another late stage asset, tirzepatide, achieved topline results from a Phase 3 study, which showed superior A1C and body weight reductions in adults with type 2 diabetes after 40 weeks of treatment. Tirzepatide is an investigational, once-weekly, insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) receptor agonist that integrates the actions of both incretins into a single molecule, representing a new class of medicines for type 2 diabetes.

Importantly, Lilly plans to submit for authorization of its investigational antibody donanemab for Alzheimer’s under the accelerated approval pathway later this year. The FDA recently granted Breakthrough Therapy designation based on clinical evidence that donanemab targets a modified form of beta amyloid called N3pG. This follows the recent FDA approval of Biogen’s Alzheimer’s therapy Aduhelm, the first drug to receive approval for AD in nearly 20 years, which is also designed to reduce amyloid beta plaques in the brain.

Finally, new data for the investigational use of Verzenio (abemaciclib) in high risk early breast cancer showed treatment with Verzenio in combination with standard endocrine therapy (ET) decreased the risk of breast cancer recurrence by 38.6 percent compared to ET alone. Also, the addition of Verzenio to ET reduced the risk of developing metastatic disease by 39%. Two Phase 3 trials are planned in 2021.

Alliances
Among Lilly’s early stage efforts, several alliances in rare disease, pain, cancer and immunology leverage proprietary development platforms. A research collaboration and exclusive license agreement with Precision BioSciences leverages Precision’s ARCUS genome editing platform for the research and development of potential in vivo therapies for genetic disorders, with an initial focus on Duchenne muscular dystrophy and two other undisclosed gene targets.

Lilly also entered a license agreement with Asahi Kasei Pharma, acquiring the exclusive rights to AK1780, an orally bioavailable P2X7 receptor antagonist that recently completed Phase 1 studies for the potential treatment of chronic pain conditions.
A research collaboration and exclusive license agreement with Lilly’s Loxo Oncology and Merus N.V. aims to research and develop up to three CD3-engaging T-cell re-directing bispecific antibody therapies, which are rapidly becoming one of the most transformative immune-modulating modalities used to treat cancer.

Additionally, a global research alliance with MiNA Therapeutics aims to develop novel drug candidates using MiNA’s small activating RNA (saRNA) technology platform to research up to five targets selected by Lilly across Lilly’s key therapeutic areas.
Lastly, an exclusive license agreement and strategic collaboration with Rigel Pharmaceuticals aims to co-develop and commercialize RIPK1 inhibitors for the potential treatment of immunological and neurodegenerative diseases. Lilly also gains an exclusive worldwide license to Rigel’s R552, a receptor-interacting serine/threonine-protein kinase 1 (RIPK1) inhibitor for all indications, including autoimmune and inflammatory diseases.

Headcount: 34,000
Revenues: $22,320 (+4%)
Earnings: $8,318 (+160)
R&D: $5,595 (+11%)

TOP SELLING DRUGS

It was big year of investments, alliances, and advancing assets for Lilly, along with a flurry of activity at the start of 2020, namely its COVID-19 efforts.

Through a series of major investments, Lilly is significantly expanding manufacturing capacity in the U.S., and its immunology pipeline. To keep up with increasing demand for current medicines, as well as provide additional manufacturing capacity for future medicines coming from its pipeline, Lilly is investing $400 million in its manufacturing facilities at its Lilly Technology Center campus in Indianapolis, IN, which will create approximately 100 new jobs.

Also, earlier this year, Lilly unveiled plans to invest more than $470 million and create more than 460 new jobs in Durham, NC with a new, state-of-the-art manufacturing facility for parenteral products and delivery devices. Lilly currently has seven manufacturing sites in the U.S., in Indiana, New Jersey and Puerto Rico.

Lastly, for approximately $1.1 billion in cash, Lilly recently acquired Dermira, Inc., a biopharmaceutical company dedicated to developing therapies for chronic skin conditions. The acquisition expands Lilly’s immunology pipeline with the addition of lebrikizumab, a Phase III monoclonal antibody designed to bind IL-13 with high affinity that is being evaluated in moderate-to-severe atopic dermatitis.
Lebrikizumab was granted Fast Track designation from the U.S. FDA in December 2019. The acquisition also expands Lilly’s portfolio of marketed dermatology medicines with the addition of QBREXZA (glycopyrronium) cloth, a medicated cloth approved by the FDA for the topical treatment of primary axillary hyperhidrosis (uncontrolled excessive underarm sweating).

Key Approvals
Lilly won several key approvals for Lyumjev and expanded indications for top sellers CYRAMZA and Taltz. Lyumjev, a new rapid-acting insulin was approved by the FDA to improve glycemic control in adults with type 1 and type 2 diabetes. Lyumjev is a novel formulation of insulin lispro, developed to speed the absorption of insulin into the blood stream and reduce A1C levels. It works similar to how natural insulin works after meals in people without diabetes.

Lyumjev has been approved by regulatory authorities in several global markets, including Japan and the European Union in March 2020.

With its latest approval, CYRAMZA has now received six FDA approvals to treat certain types of lung, liver, stomach and colorectal cancers. The FDA approved CYRAMZA (ramucirumab) in combination with erlotinib for the first-line treatment of metastatic non-small cell lung cancer (NSCLC) with epidermal growth factor receptor (EGFR) exon 19 deletions or exon 21 (L858R) mutations.
The approval is based on the Phase III RELAY trial in which CYRAMZA, a VEGF receptor 2 antagonist, in combination with erlotinib, demonstrated a statistically significant and clinically meaningful improvement in progression-free survival compared to placebo in combination with erlotinib (19.4 months compared to 12.4 months).

Fifty percent of people with NSCLC present with advanced or metastatic disease at diagnosis. The five-year survival rate for metastatic NSCLC patients is six percent. In the U.S., it is estimated that approximately 15 percent of people diagnosed with NSCLC have an EGFR mutation.

The FDA also approved Taltz injection for the treatment of active ankylosing spondylitis (AS), also known as radiographic axial spondyloarthritis (r-axSpA). This is the third indication for Taltz, which was first approved by the FDA in March 2016 for the treatment of moderate to severe plaque psoriasis, and then approved by the FDA in December 2017 for the treatment of adults with active psoriatic arthritis.

Additionally, Verzenio, indicated for the treatment of HR+, HER2- advanced or metastatic breast cancer, recently met the primary endpoint in a Phase III trial of invasive disease-free survival (IDFS), significantly decreasing the risk of breast cancer recurrence or death compared to standard adjuvant endocrine therapy alone. Verzenio is the only CDK4 & 6 inhibitor to demonstrate statistically significant improvement in invasive disease-free survival in this setting. Lilly will submit data from this trial to regulatory authorities around the world.

Of note, Verzenio is Lilly’s first solid oral dosage form to be made using a faster, more efficient continuous manufacturing process, and Lilly is among the first companies to use this technology.

Research Alliances
In September, Lilly and Thermo Fisher Scientific partnered for the development of a companion diagnostic that will use the FDA-approved, next-generation sequencing-based Oncomine Dx Target Test to identify certain non-small cell lung cancer (NSCLC) and thyroid cancer patients who may be treated with Lilly’s investigational therapy, LOXO-292. Specifically, the test would be used with patients whose tumors harbor a rearranged during transfection (RET) alteration. RET variants are found in about two percent of NSCLC, about 60 percent of medullary thyroid cancer (MTC) and up to approximately 20 percent of other thyroid cancers.

LOXO-292 is a highly selective and potent oral RET inhibitor being studied by Lilly in a Phase 1/2 trial for the treatment of advanced cancers that harbor the RET kinase.
More recently, Lilly entered an exclusive global licensing and research collaboration with Sitryx, a biopharma company focused on regulating cell metabolism to develop disease-modifying therapeutics in immuno-oncology and immuno-inflammation. The collaboration will study up to four preclinical targets identified by Sitryx that could lead to potential new medicines for autoimmune diseases.

Sitryx gets $50 million upfront and Lilly will make a $10 million equity investment in Sitryx. Sitryx will be eligible to receive potential development milestones up to $820 million, as well as potential commercialization milestones and royalties.

Lilly has an exclusive, worldwide license to develop and commercialize up to four immunometabolism targeted therapeutics, including Sitryx’s two lead projects.

COVID-19 Efforts
In June, Lilly initiated a Phase III study to evaluate the efficacy and safety of baricitinib, an oral JAK1/JAK2 inhibitor licensed from Incyte, in hospitalized COVID-19 patients. Baricitinib, marketed as OLUMIANT, is approved in 70 countries as a treatment for adults with moderately to severely active rheumatoid arthritis (RA). The study, being conducted in the U.S., Europe and Latin America, includes patients hospitalized with SARS-CoV-2 infection who have at least one elevated marker of inflammation but do not require invasive mechanical ventilation. Data is expected in the next few months.

In COVID-19 infection, increased disease severity can be associated with a hyperinflammatory state. Through JAK1 and JAK2 inhibition, baricitinib may reduce the cytokine storm associated with the complications of this infection. In addition, baricitinib may have a role in inhibiting the host cell proteins that assist in viral reproduction.

In May, Lilly partnered with Junshi Biosciences to co-develop therapeutic antibodies for the potential prevention and treatment of COVID-19.

The investigational medicine, JS016, is being co-developed by Junshi Biosciences and Lilly, with Junshi Biosciences leading development in Greater China. Lilly has exclusive rights in the rest of the world and a Phase I study in the U.S. is underway to evaluate the safety, tolerability, pharmacokinetics and immunogenicity of JS016 in healthy participants who have not been diagnosed with COVID-19. This is Lilly’s second neutralizing antibody to start clinical trials, following LY-CoV555 that recently entered Phase I and is currently being tested in hospitalized COVID-19 patients.

Lilly is planning a clinical development program which includes a portfolio of monotherapy and combination antibody regimens in order to understand which provide the best efficacy and tolerability in patients. These cocktails will include JS016, LY-CoV555, as well as additional antibodies currently in preclinical development.

The investigational medicine, LY-CoV555, is the first to emerge from the collaboration between Lilly and AbCellera to create antibody therapies for the prevention and treatment of COVID-19. Lilly scientists rapidly developed the antibody in just three months after AbCellera and the Vaccine Research Center at the National Institute of Allergy and Infectious Diseases (NIAID) identified it from a blood sample taken from one of the first U.S. patients who recovered from COVID-19. LY-CoV555 is the first potential new medicine specifically designed to attack SARS-CoV-2.

Lilly is also advancing LY3127804, an investigational selective monoclonal antibody against Angiopoietin 2 (Ang2), to Phase II testing in pneumonia patients hospitalized with COVID-19 who are at a higher risk of progressing to acute respiratory distress syndrome (ARDS).

Headcount: 38,680
Revenues: $24,556 (+7%)
Earnings: $3,232 (NM)
R&D: $5,307 (-1%)

TOP SELLING DRUGS  

Ascending the ranks, Eli Lilly’s products are performing well and key late stage assets are advancing. Despite generic competition for one of the company’s best-selling products, Cialis, and slipping sales for flagship insulin products Humalog and Humulin, and other established brands, Forteo, Cymbalta, and Erbitux, revenues for the year were up 7%. Burgeoning sales of psoriasis and psoriatic arthritis drug Taltz, up 68% for the year, and diabetes products Trulicity, Basaglar, and Jardiance, up 58%, 85%, and 47%, respectively, helped to offset established product declines.

Also, newly launched breast cancer drug Verzenio is off to good start, and Emgality, approved in September for migraine prevention, and more recently for preventing episodic cluster headaches, offers tremendous potential with estimated peak annual sales of approximately $700 million. Lilly’s numerous late stage assets include another promising migraine drug, lasmiditan, pending approval, and, in addition to expanded indications for top sellers, such Alimta, promising new candidates include mirikizumab, an immunology therapy being studied in Crohn’s disease, and tanezumab being studied in osteoarthritic, back, and cancer pain.

Additionally, broadening its oncology portfolio, the pending $8 billion acquisition of Loxo Oncology will provide Lilly entry into precision medicine with approved and investigational medicines.

Strategic Initiatives
In addition to the pending acquisition of Loxo Oncology, Lilly has recently made several strategic moves, including the divestiture of its Animal health business, Elanco, which raised $1.5 billion in its stock market debut, and the sale of antibiotic assets in China for $375 million.

The Loxo Oncology acquisition was the largest in a series of strategic transactions to expand its oncology pipeline with externally sourced, first-in-class therapies. Loxo’s pipeline of targeted medicines is focused on cancers that are uniquely dependent on single gene abnormalities that can be detected by genomic testing.

Among its assets, LOXO-292, an oral RET inhibitor that has been granted Breakthrough Therapy designation by the FDA for three indications, has an initial potential launch in 2020. RET fusions and mutations occur across multiple tumor types, including certain lung and thyroid cancers as well as a subset of other cancers.

Also, Vitrakvi, an oral TRK inhibitor developed and commercialized in collaboration with Bayer, was recently approved by the FDA. Vitrakvi is the first treatment that targets a specific genetic abnormality to receive a tumor-agnostic indication at the time of initial approval.  LOXO-195, a follow-on TRK inhibitor is also being studied by Loxo and Bayer for acquired resistance to TRK inhibition, and has a potential launch in 2022.

This past March, Elanco Animal Health became a fully independent company. The spin-off is intended to provide a greater focus on Lilly’s human pharmaceuticals business, which the company is heavily investing in.

Lilly recently sold the rights in China for two legacy antibiotics, Ceclor and Vancocin, as well as a manufacturing facility in Suzhou, to Eddingpharm, a China-based specialty pharmaceutical company, in a transaction valued at $375 million.

R&D Advances
Thanks to a recent head-to-head study, Talz is performing even better than expected. Talz surpassed Humira in reducing PsA disease activity by half and completely clearing patient skin after 24 weeks, according to data from a Phase IIIB/IV study. Thirty-six percent of the 234 trial patients treated with Taltz achieved both markers at 24 weeks, compared to 28% of Humira patients. Taltz also achieved its secondary endpoints of matching Humira in disease activity and surpassing it in clearing skin.

Representing a significant approval for Lilly, Emgality injection was approved by the FDA for the treatment of episodic cluster headache in adults. Emgality is an innovative therapeutic approach for this neurologic disease and the first and only calcitonin gene-related peptide antibody approved by the FDA for two distinct headache disorders. Emgality was first approved by the FDA in September 2018 for the preventive treatment of migraine.

Also, Cyramza received approval from the FDA as a single agent for the treatment of patients with hepatocellular carcinoma (HCC), marking the fifth FDA approval for Cyramza. Importantly, the FDA has also removed the boxed warning from the labeling, which should boost sales further.

Additionally, the FDA approved a new indication for top seller Alimta in combination with Merck’s Keytruda for the first-line treatment of patients with metastatic nonsquamous non-small cell lung cancer, with no EGFR or ALK genomic tumor aberrations.

From its pain portfolio, Lilly and Pfizer achieved positive results from a Phase III study evaluating tanezumab in moderate-to-severe chronic low back pain, meeting the primary endpoint demonstrating a statistically significant improvement in pain. Furthermore, Lilly has acquired several pain assets, gaining rights to CNTX-0290 from Centrexion Therapeutics for $47.5 million upfront and as much as $575 million in potential development milestones. CNTX-0290 is a small molecule somatostatin receptor type 4 (SSTR4) agonist currently in Phase I testing as a potential non-opioid treatment for chronic pain conditions.

Lilly also acquired all assets related to Hydra Biosciences’ program of TRPA1 antagonists, currently being studied for the potential treatment of chronic pain syndromes.

Lilly has not given up on its diabetes therapeutic endeavors. Lilly bolstered its diabetes portfolio with Chugai’s oral GLP-1 agonist, OWL833, a Phase I-ready asset being studied in type 2 diabetes. Also, Lilly and Boehringer recently submitted a NDA for the fixed-dose combination tablet of empagliflozin, linagliptin and metformin extended release for type 2 diabetes.

Collaborations
Lilly has several immunology alliances underway leveraging platform technologies of partner companies. A global alliance with Avidity aims to develop new medicines in immunology and other indications leveraging Avidity’s technology platform to potentially overcome barriers to the delivery of oligonucleotides and target genetic drivers of disease.

A research collaboration leveraging Aduro’s cGAS-STING Pathway Inhibitor program aims to develop immunotherapies for autoimmune and other inflammatory diseases. Additionally, an agreement with AC Immune will research tau aggregation inhibitor small molecules for the potential treatment of Alzheimer’s disease and other neurodegenerative diseases leveraging AC Immune’s Morphomer platform technology.

Headcount: 38,131
Revenues: $22,871 (+8%)
LOSS:  $204 (n/a)
R&D: $5,282 (+1%)

TOP SELLING DRUGS  

In 2017 Eli Lilly and Co. reported an 8% growth in revenue to $23 billion from $21 billion the year before. Sales in Endocrinology increased 25 percent primarily driven by growth of Trulicity, Basaglar, Forteo, Jardiance, and Trajenta. Oncology grew 2 percent primarily due to higher volumes for Lartruvo and Cyramza, partially offset by lower volumes for Alimta, and Immunology grew due to higher volumes for Taltz. Revenue in Neuroscience decreased 20 percent driven by lower volumes for Strattera, Cymbalta, and Zyprexa due to loss of patent protection, and Cardiovascular decreased 11 percent driven by lower volumes for Cialis and Effient.

In new products approvals, at the end of September 2017 the FDA approved Lilly’s Verzenio (abemaciclib) to treat breast cancer. Verzenio provides a new targeted treatment option for certain patients with breast cancer who are not responding to treatment, and unlike other drugs in the class, it can be given as a stand-alone treatment to patients who were previously treated with endocrine therapy and chemotherapy. Breast cancer is the most common form of cancer in the U.S. and Verzenio has the potential to be an important treatment option for patients.

Expanding the pipeline through acquisition

In 2017 Lilly acquired CoLucid for approximately $960 million, enhancing its portfolio in pain management for migraine with a potential near-term launch. CoLucid is developing an oral 5-HT1F agonist (lasmiditan) for the acute treatment of migraine and has completed the first of two Phase III trials, and pending results, submission of lasmiditan for U.S. regulatory approval are scheduled for 2018.

If approved, Lasmiditan would be a first-in-class therapy to treat migraine through a novel mechanism of action without vasoconstriction. This could be desirable in migraine patients who have, or are at risk for, cardiovascular disease, as well as those who are dissatisfied with their current therapies.

Lasmiditan was originally discovered at Lilly and was out-licensed to CoLucid in 2005. CoLucid has taken important steps to decrease the risk related to development and commercialization of lasmiditan. Lilly has since reorganized its R&D efforts to focus on migraine as part of its emerging therapeutic area of pain.

In more recent acquisition news, Lilly entered an agreement in May 2018 to acquire ARMO BioSciences for approximately $1.6 billion, expanding its portfolio of immuno-oncology therapies. ARMO, based in Redwood City, CA is developing cancer treatments that harness the body’s immune system to fight tumors. Its lead candidate, AM0010 is being investigated in a pivotal Phase III trial in pancreatic cancer. According to Armo, AM0010 has demonstrated clinical benefit on its own, but can also be combined with chemotherapy and checkpoint inhibitor therapies across several tumor types.

AM0010, a long-acting form of recombinant human interleukin 10 (IL-10) linked to polyethylene glycol (PEG), is also being investigated in Phase II studies in combination with Merck’s Keytruda and Bristol-Myers Squibb’s Opdivo in patients with metastatic non-small-cell lung cancer.

Armo’s immune-oncology pipeline also includes several preclinical candidates—AM0001, an anti-PD-1 monoclonal antibody; AM0003, an anti-LAG-3 checkpoint inhibitor; AM0015, a form of recombinant human interleukin-15 (IL-15); and AM0012, a form of recombinant human interleukin-12 (IL-12).

Development deals and supply pacts

Lilly and Purdue University entered a strategic five-year agreement, under which Lilly will provide as much as $52 million to develop improved delivery of injectable medicines to reduce pain, number of injections, and improve patient compliance. The collaboration will also focus on developing predictive models for clinical trials that reduce risks associated with investing in drug development and more effectively predict the outcome of new therapies in humans. The collaboration aims to expand to other areas to further leverage the range of expertise at the two institutions.

Also, Rimidi and Lilly are partnering to develop provider-focused tools that will integrate personalized solutions for people who use insulin to manage their diabetes. Under the partnership, Rimidi will integrate its diabetes management software platform with Lilly’s integrated insulin management system in development.

The non-exclusive agreement aims to make diabetes management easier for the approximately 30 million Americans by helping people use insulin more effectively while optimizing diabetes management within the normal clinical workflow.

Rimidi’s platform helps clinicians personalize care by leveraging the individual characteristics and clinical histories of people with diabetes to identify individuals who may benefit from specific management approaches. Lilly’s insulin management system combines a connected insulin pen with glucose-sensing technologies (e.g., glucose meter, CGM) and software applications to deliver personalized insulin dose recommendations. Data from these devices and apps will flow back to physicians.

With Evonik Industries, Lilly renewed a long-term supply agreement for active pharmaceutical ingredients (APIs) and intermediates for use in key Lilly human and veterinary drug products. Evonik acquired Lilly’s Tippecanoe site in Lafayette, IN, in January 2010. Since then, the facility has been operating as a contract development and manufacturing organization (CDMO) for the pharma industry, serving more than 20 Evonik customers. The facility has 170 cubic meters of high potency APIs (HPAPIs) capacity and a total of 860 cubic meters of cGMP manufacturing.

Headcount: 42,066
Revenues: $21,222 (+6%)
Net Income: $2,738 (+14%)
R&D: $5,244 (+9%)

TOP SELLING DRUGS 

While Lilly dropped a spot to number 13 this year revenues were up from $19.9 billion to $21.2 billion in 2016. U.S. sales were $11.5 billion while outside the U.S. sales were $9.7 billion. The Indianapolis, IN-based company reported revenue growth across its three largest therapeutic areas. The Endocrinology segment increased 15% to $8 billion primarily driven by growth of Trulicity, Forteo, Jardiance, Trajenta, and Basaglar. Oncology grew 6% to $3.7 billion due to higher volumes for Cyramza and Erbitux, and Cardiovascular grew 5% to $3.2 billion, mostly due to higher realized price for Cialis. Revenue in Neuroscience decreased 7% to $2.7 billion as a result of lower volumes for Zyprexa and Cymbalta following patent expirations.

On the drug development front, the company reported two new molecular entities (NMEs) were approved by regulatory authorities in 2016, Ixekizumab (Taltz), a neutralizing monoclonal antibody to interleukin-17A for the treatment of moderate-to-severe plaque psoriasis and psoriatic arthritis, and Olaratumab (Lartruvo), a human lgG1 monoclonal antibody for the treatment of advanced soft tissue sarcoma.

During the year, Lilly continued its successful Alzheimer’s disease collaboration with AstraZeneca. It received Fast Track designation from the FDA for the AZD3293 development program, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in Phase III trials. The FDA’s Fast Track program is designed to expedite the development and review of new therapies to treat serious conditions and tackle key unmet medical needs.

AZD3293 has been shown in Phase I studies to reduce levels of amyloid beta in the cerebro-spinal fluid of people with Alzheimer’s and healthy volunteers. The progression of Alzheimer’s disease is characterized by the accumulation of amyloid plaque in the brain. BACE is an enzyme associated with the development of amyloid beta and inhibiting BACE is expected to prevent the formation of amyloid plaque and eventually slow the progression of the disease.

AstraZeneca received a $100 million milestone payment from Lilly now that AZD3293 has moved into Phase III testing in the Amaranth study.

The two companies also announced the planned initiation of a new Phase III trial for AZD3293, named Daybreak,which will study the safety and efficacy of AZD3293 in people with mild Alzheimer’s dementia.

The alliance between the two companies was formed in 2014 for the development and commercialization of AZD3293/LY3314814. Lilly leads clinical development, working with researchers from AstraZeneca’s neuroscience research and development team, while AstraZeneca is responsible for manufacturing. The companies have joint responsibility for commercialization of the molecule and will share all future costs equally for development and commercialization, as well as net global revenues post-launch.

In another Alzheimer’s alliance, Lilly and AstraZeneca are co-developing MEDI1814, an antibody selective for amyloid-beta 42 (Aβ42), which is  in Phase I development. AstraZeneca received a $30 million upfront payment from Lilly.

In another clinical trial collaboration, Lilly and Boehringer Ingelheim teamed up to battle metastatic breast cancer. The collaboration will evaluate the safety and tolerability of abemaciclib (LY2835219), Lilly’s cyclin-dependent kinase (CDK) 4 and CDK 6 inhibitor, in combination with BI 836845, Boehringer’s insulin-like growth factor (IGF)-1/IGF-2 ligand neutralizing antibody, in patients diagnosed with HR+, HER2- mBC. Based on the Phase Ib trial results, the collaboration has the potential to expand to Phase II trials in patients with HR+, HER2- mBC and other solid tumors.

Lilly’s abemaciclib is designed to block the growth of cancer cells by specifically inhibiting CDK 4 and CDK 6. In many cancers, uncontrolled cell growth arises from a loss of control in regulating the cell cycle due to increased signaling from CDK 4 and CDK 6. Boehringer’s BI 836845 is an IGF ligand-neutralizing antibody that binds to both IGF-1 and IGF-2 preventing activation of the respective receptor, resulting in decreased growth-promoting signaling, which may decrease tumor growth. In a Phase Ib/II trial, BI 836845 has shown promising preliminary efficacy and good clinical safety in combination with everolimus and exemestane in patients with HR+ mBC.

The rationale for the collaboration is based upon the hypothesis that these two agents, in combination, could offer a more complete pathway interference and could potentially prolong cell cycle arrest. For HR+, HER2- mBC patients, this could translate to a reversal of resistance to hormone therapy.

Lastly, Regen BioPharma entered into an agreement with Lilly to receive compounds for drug discovery purposes and allows Regen to share structural information on compounds of mutual interest. Regen will examine 21,000 Lilly compounds in its NR2F6 high-throughput screening program to identify activators and inhibitors of this protein. NR2F6 is a molecular switch known as an “orphan nuclear receptor,” which controls genes associated with the immune response as well as genes associated with the ability of cancer stem cells to propagate. Lilly has an option to negotiate a compound purchase agreement, a license agreement, or a research collaboration agreement for further research and development of material of mutual interest.

Headcount: 41,000
Revenues: $19,959 (+2%)
Net Income: $2,408 (+1%)
R&D: $4,796 (+1%)

TOP SELLING DRUGS

In 2015 Lilly returned to revenue growth, led by Cyramza and Trulicity following their launches, with significant contributions from its enlarged animal health business, which got a boost after it completed the acquisition of Novartis Animal Health for $5.28 billion at the start of the year under review. Revenue increased 2 percent to $19.96 billion, with six products topping $1 billion in annual sales.

Lilly also reported positive advances in its pipeline of molecules in clinical development. Highlights include: in diabetes, positive cardiovascular outcomes data for Jardiance; in immunology, four positive Phase III studies on baricitinib and strong Phase III data on ixekizumab; and in oncology, Breakthrough Therapy Designation for olaratumab and abemaciclib, several important business development deals in immuno-oncology, and the approval of Portrazza for the treatment of metastatic squamous non-small cell lung cancer late in the year.

The year was active for Lilly on the collaboration front, which saw it expand already existing agreements and form new alliances as well. With Innovent Biologics, Lilly has in place a plan to develop and commercialize a portfolio of cancer treatments. In 2015 the two companies expanded the drug development collaboration, already one of the largest in China between a multi-national and domestic biopharmaceutical company. The companies said they will collaborate to support the development and potential commercialization of up to three anti-PD-1 based bispecific antibodies for cancer treatments over the next decade, both inside and outside of China. Lilly will exercise its rights to develop, manufacture and commercialize these potential cancer treatments outside of China, while Innovent will now have the rights to develop, manufacture and commercialize these potential cancer treatments for China.

Also in China, WuXi PharmaTech (Cayman) and Lilly entered into a strategic collaboration to develop, manufacture and commercialize a novel small molecule. The once-daily oral agent, discovered by Lilly, has the potential to address cardiovascular risk in patients with dyslipidemia. An estimated 276 million patients in China are affected by these conditions. The drug aims to reduce cardiovascular events in patients with elevated LDL cholesterol and triglycerides at high risk of cardiovascular events. WuXi will be responsible for regulatory, development and manufacturing activities in China and Lilly will be responsible for commercial activities. Both companies will invest in this potential new medicine in China. An Investigational New Drug (IND) application will be filed in China by WuXi, and product development and registration will take place within China.

A collaboration agreement was formed with Hanmi to develop and commercialize Hanmi’s compound being investigated for the treatment of autoimmune and other diseases. Lilly received rights to the molecule for all indications on a worldwide basis excluding China, Hong Kong, Taiwan, and Korea, and will be responsible for leading development, regulatory, manufacturing, and commercial efforts in our territories.

Another research collaboration with BioNTech aims to discover novel cancer immunotherapies. The companies will collaborate to identify and validate tumor targets and their corresponding T cell receptors (TCRs) in one or more types of cancer. These tumor targets and TCRs may then be engineered and developed into potent and selective cancer therapies.

Lilly entered a global collaboration and license agreement with Halozyme to develop and commercialize products combining its proprietary compounds with Halozyme’s Enhanze platform to aid in the dispersion and absorption of other injected therapeutic drugs. For Lilly, this technology may allow for more rapid delivery of injectable medications through subcutaneous delivery.

Toward the end of the year, Lilly and Merck extended an existing collaboration to evaluate the safety and efficacy of the combination of Lilly’s Alimta (pemetrexed for injection) and Merck’s Keytruda (pembrolizumab) in a Phase III study in first-line nonsquamous non-small cell lung cancer (NSCLC). The expansion of this oncology trial collaboration follows encouraging data from a Phase I study, which evaluated pemetrexed, carboplatin and pembrolizumab in first-line nonsquamous NSCLC.

Lilly and AstraZeneca also extended their existing immuno-oncology collaboration exploring novel combination therapies for the treatment of solid tumors. The companies will now evaluate the safety and efficacy of a range of additional combinations across their portfolios. Lilly will lead the studies and both companies will contribute resources. Earlier in the year, the companies entered a Phase I clinical trial collaboration to evaluate the safety and preliminary efficacy of combining durvalumab and ramucirumab as a treatment for patients with advanced solid tumors.

R&D expansions

In November Lilly unveiled plans to expand its global R&D headquarters in Indianapolis, IN, adding 130,000 square feet to its existing complex. The $70 million investment will feature a multi-disciplinary lab that facilitates collaboration across multiple research functions. The new building is part of Lilly’s continued growth of its Indianapolis footprint, which included a $400 million expansion initiated in 2013 to increase its insulin manufacturing capacity.

When complete in 2017, the new building will enable chemists and engineers to work together a collaboration-centric workspace with modelling, analytical and formulation scientists. The company’s strategy incorporates flexible labs that can adapt as research and technology needs evolve, as well as open, interactive meeting spaces that are meant to promote multi-disciplinary problem-solving.

The lab will focus its efforts on small molecules, which currently comprise about half of Lilly’s investigational drug portfolio.

In May, Lilly unveiled plans to establish a new drug delivery and device innovation center in Cambridge, MA, which was opened by year’s end. The Lilly Cambridge Innovation Center is designed to allow life science organizations to explore how emerging technologies and connectivity can advance drug delivery and device innovation. The center increases the company’s delivery and device R&D space by nearly 50% and increasing staff by 25%.

According to the company, the center will serve as a portal for external partnerships and collaboration activities with the company’s existing research facilities in San Diego, New York City and Indianapolis. During the year Lilly also said it expanded the San Diego biotech center as well as its presence at the Alexandria Center for Life Science in New York, NY.

More than half of the company’s pipeline now comprises biologics that require some type of injection. The company expects its revenues from device-enabled products to double by 2020.

Headcount: 41,000
Revenues: $19,615 (-15%)
Net Income: $2,391 (-49%)
R&D: $4,734 (-14%)

TOP SELLING DRUGS
Drug Indication 2013 sales  (+/- %)
Alimta cancer $2,792 3%
Cialis erectile dysfunction $2,291 6%
Cymbalta anxiety, depression $1,615 -68%
Humulin diabetes $1,400 6%
Forteo osteoporosis $1,322 6%
Zyprexa schizophrenia $1,037 -13%
Strattera ADHD $739 4%
Effient anticoagulant $522 3%
Evista postmenopausal osteoporosis $420 -60%

For years Lilly had maintained its post as a top ten pharma company—until now. In a tough year for the drug maker, Lilly slipped from eight and nine in 2012 and 2013/2014 rankings, respectively, to 13. Exchange rates, patent losses and generic competition ate away at Lilly’s revenues, taking a toll on 2014 results.

However, this innovator’s outlook is far from dire. In addition to top sellers, Humalog, Cialis, Effient, Forteo, and Alimta, investing in its animal health business Elanco, and reducing its headcount by 5,500 during the past five years, Lilly managed to drive revenue growth and reduce costs.

The first quarter of 2015 highlights Lilly’s road to recovery, with $4.6 billion in revenues (-1%), and earnings of $529.5 million (-27%). In January, the company finalized its acquisition of Novartis Animal Health for approximately $5.4 billion in cash, with Animal Health revenues up 42% to $749.8 million, offsetting lingering effects of patent expirations for Cymbalta (-40% to $287 million) and Evista (-55% to $66.8 million). Cyramza brought in $67.5 million, Humalog sales were up 5% to $684.0 million and Cialis sales were up 1% to $538.3 million.

On the other hand, Alimta saw its first sales decline, down 9% to $573.0 million. In March, a German court ruled against Lilly in a patent case, and an English court had similarly ruled against Alimta’s patent last April. Zyprexa sales also declined (-22% to $219.5 million) as a result of generic competition.

However, several newly approved and intriguing diabetes compounds hold important revenue potential for Lilly’s post patent expiration recovery, notably, its insulin glargine product, a biosimilar to Sanofi’s Lantus, co-developed under its alliance with Boehringer Ingelheim. Glargine has been tentatively approved in the U.S. and was approved in Europe in September, becoming the first biosimilar insulin to receive regulatory approval in the EU. Other potential treatments, including fixed-dose combinations, are also under development.

Additionally, Trulicity (dulaglutide), which belongs to a category of drugs called GLP-1 receptor agonists that act by mimicking the body’s own glucagon-like peptide-1, will now compete directly against the leader in its class, Novo Nordisk’s Victoza, a $2.1 billion drug, and AstraZeneca’s Byetta and Bydureon, which brought in $767 million in 2014.

Trulicity outperformed Byetta in Phase III trials and is dosed weekly, giving it an advantage over Victoza, which must be injected daily. Analysts estimate Trulicity could eventually generate peak annual sales of around $1.7 billion. While using an immunoglobulin molecule to extend the half-life of drugs is not new, Trulicity is the only GLP-1 so far to use this mechanism.

Lastly, Lilly’s SGLT-2 inhibitor empagliflozin, a diabetes drug also co-developed under its Boehringer alliance, significantly lowered blood glucose levels compared to insulin alone, and will compete with Johnson & Johnson’s Invokana and AstraZeneca’s Forxiga.

Adapting to a burgeoning biologics business

With more than half of the company’s pipeline now comprised of biologics that require some type of injection, Lilly is building a new drug delivery and device innovation center in Cambridge, MA to explore how emerging technologies can advance drug delivery and device innovation. When operational late this year, the facility will increase its delivery and device R&D space by nearly 50% and its staff by 25%. Lilly expects its revenues from device-enabled products to double by 2020.

Additionally, Lilly is pursuing the sale of one of its three manufacturing plants in PR based on the evolution of its growing insulin and biologics portfolio, coupled with a less intensive small molecule portfolio. Lilly is continuing to invest in the two remaining manufacturing plants at Carolina, recently spending $200 million to increase capacity at its insulin active ingredient plant, and $40 million to increase capabilities at its drug product site for its oral solid dosage network.

Significantly, in one of the largest biotech drug development collaborations of its kind in China, Lilly and Innovent Biologics will work to develop and commercialize at least three cancer treatments in the next decade, expanding both companies presence in the Chinese oncology market.

Lilly will contribute its cMet monoclonal antibody gene for possible treatment of non-small cell lung cancer and Innovent will contribute its monoclonal antibody targeting protein CD-20 for investigation in hematologic malignancies, as well as an immuno-oncology asset.

Advancing the pipeline

In recent late stage developments, Lilly and AstraZeneca are co-developing AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor, which is advancing into a Phase II/III trial in patients with early Alzheimer’s disease (AD). AZD3293 has been shown to reduce levels of beta-amyloid in Alzheimer’s patients and healthy volunteers.

Also, Pfizer and Lilly resumed a Phase III program for Tanezumab in chronic pain following a decision by the FDA to lift the partial clinical hold after a review of nonclinical data characterizing the sympathetic nervous system response to tanezumab.

Holding more promise, Lilly’s Ixekizumab met its primary endpoint in a Phase III trial for the treatment of psoriatic arthritis, proving statistically superior to placebo and representing a 20% reduction in signs and symptoms of the disease. And, in February, investigational drug baricitinib proved superior in reducing rheumatoid arthritis disease compared to placebo in a second consecutive Phase III trial, meeting its primary endpoint.

While the numbers might not yet reveal success, Lilly is transitioning from a challenging period of patent expirations to growth, driven by its animal health business, mainstay products, the launch of new and promising medicines, and an advancing pipeline. If all goes well, it is likely Lilly will be out of the red by this time next year.

KING’S REPORT

Lilly hasn’t really had the start to the year that it would have been looking for, having fallen down the rankings this year. Lilly suffered from the ‘black hole’ patent pit that has kept them lucratively afloat during recent years. With Cymbalta, Evista and Zyprexa all having lost protection and Alimta and Cialis heading in the same direction in 2017, its drug pipeline needs to gain some muscle.

Lilly is confident though that its future lies in oncology and the launch and license extensions of Cyramza will provide a scaffold to support them when the plug gets pulled with the patent expiries, but is it going to be enough? Lilly is moving its CDK 4/6 Dual Inhibitor Abemaciclib through development and has plenty of other potential drugs plotted in its pipeline, but it pulled $1 billion dollars out of R&D last year, which never looks good.

There has been much speculation that Lilly will re-visit Alzheimer’s disease with solanezumab, which crashed and burned in 2012. The company continued to investigate mild forms of the disease extending the study for two years, and with the results being made available any time now maybe this could provide a financial foothold to keep them going.

—Adele Graham-King

Headcount: 38,000
Pharma Revenues: $23,113 (12%)
Net Income: $4,684 (14%)
R&D Budget: $5,531 (5%)

Top Selling Drugs

Despite the loss of patent protection for Cymbalta (generic versions of which are now being sold by Dr Reddy’s and Teva) and Evista, Eli Lilly saw its revenues go up 2% last year, and its net income increased by 15%.

The company has continued to invest in research in a number of areas including diabetes, but also cancer therapies and treatment of pain.  As CEO John Lechleiter wrote in its 2014 annual report, 10 years ago, the company had a total of seven molecules in Phases II and III combined.  Today, it has 12 in Phase III and 25 in Phase II.  In addition, it has the industry’s highest R&D spending to sales ratio in the pharma industry, he wrote.

Diabetes continues to be a major focus for the company, which is also actively researching oncology therapies.

Lantus Biosimilar is Approved in Europe
Lilly and Boehringer-Ingelheim have been collaborating on diabetes research for the past three years, resulting in experimental products such as Tagenta and empagliflozin.

They had submitted an application for empagliflozin, an oral SGLT2 inhibitor, to FDA last year, but due to past issues at Boehringer-Ingelheim’s plant, they resubmitted the NDA recently.

Lilly is increasing its focus on oncology drugs, and its gastric cancer treatmet, Ramocirumab, which was recently approved by FDA, has shown mixed results in reearch testing its use for treating other cancers.

Also in the works are treatments for lung cancer such as  necitumumab, developed for Squamus non small cell lung cancer, an illness that has seen little innovation in recent years.

Understanding the Roots of Chronic Pain
Pain treatment is another area of interest, and the company set up a research program in the Midwestern U.S. with the Universities of Cincinnati and Michigan last month, called the Midwest Pain Consortium. This consortium will conduct basic research into chronic pain, which affects 100 million people in this country.

Lilly and Pfizer are collaborating on developing the monoclonal antibody, Tanezumab, which would treat chronic pain due to osteoporosis.

In the treatment of Alzheimer’s disease, Lilly is not giving up on its experimental treatment solanezumab.  Two years ago, the company had stopped clinical work on the compound, but has since revived research.

It has also partnered with Alzheimer’s Disease International, to make available educational resources and other tools designed to help enable better communication and earlier diagnosis and treatment of Alzheimer’s.

Lilly has built up its presence in animal health with its acquisition of Novartis’ business, which will make it the second largest animal health company in the world. The buy will add about 600 products and nine production facilities.

In short, the company has continued to build on its strengths and to innovate. Summarizing strategies is this excerpt from a speech that CEO John Lechleiter gave in Japan last year:

“…Today, our industry, like many others, is undergoing unprecedented change. We are in the midst of a five-year period when what was $150 billion or so of branded medicine sales will face competition from generics, and innovator company revenues will largely erode. Meanwhile, for now, there are too few new products to step into the breach. R&D output continues to lag, it would seem.

And our own company faces the greatest challenge in its history, a microcosm of the industry’s predicament, as we attempt to navigate through a period when several of our major products face patent expiries in countries around the world, even as we await the full maturation of our own pipeline.

Yet, I must say, I find uncertainty to be a source of opportunity. Maybe it’s because uncertainty is so prominently embedded in our pharmaceutical business model…

…I’d like to suggest three principles for leading amid uncertainty and turbulence:

First, make sense of uncertainty by distinguishing between what won’t change and what must change.

Second, control what you can; be prepared for inevitable bad surprises, and be ready to capture unpredictable upside.
Third, maintain a long-term perspective… set your sights beyond the current crisis…

While it’s tempting to complain about the pressures and uncertainties of the external world, it’s a lot more worthwhile to focus on the factors that are under our control…

At Lilly, we’re responding to the challenge of patent expirations by doing what we’re good at and what we know best—discovering and developing new medicines that meet important medical needs.

We’re sticking to our innovation strategy, working to advance our pipeline of potential medicines in order to return to sustained growth…

In a fluid environment, it’s probably better to make lots of little bets rather than a few big ones. If those little ones don’t work, you haven’t sacrificed the enterprise…

As an organization that makes huge investments in research, we know when budgets are tight, the first temptation is to cut R&D. We also know that our future depends on innovation…”

Headcount: 38,100
Pharma Revenues: $20,566 (-9%)
Total Revenues: $22,603 (-7%)
Net Income: $4,089 (-6%)
R&D Budget$5,278

Top Selling Drugs

Account for 86% of total pharma sales, same as in 2011

Lilly climbed in this year’s ranks, but only because BMS out-plummeted it. The Indianapolis pharma may hold steady in next year’s ranking, too, although it has a pretty steep patent cliff ahead. Revenues fell $2.0 billion in 2012, with Zyprexa shedding $3.0 billion in sales.

Shortly after press time last year, Lilly received a six-month extension on Cymbalta’s patent protection in the U.S., courtesy of pediatric exclusivity. (The drug isn’t approved for people under 18, and Lilly doesn’t plan on pursuing a pediatric indication.) That means Lilly’s top-selling drug will now face generic competition beginning in December 2013, cramming most of its revenue loss into a single fiscal year. That’s the best light we can shine on the prospects of the company losing most of a $5.0 billion revenue source.

Lilly also got good news in August 2012, when a U.S. court upheld its compound patent for Alimta, giving it protection through 2017. That’ll keep its #2 drug on the market long enough to become #1 (unless Humalog passes it up, as it did in 1Q13). Still, the specter of disappearing Cymbalta and Evista revenues led Lilly to lay off 1,000 sales reps in April 2013. The move cleared out almost 30% of Lilly’s U.S. sales force, at a cost of $64.7 million.

As with most of its competitors, Lilly hasn’t had enough production from its pipeline to offset its expiring drugs. Effient, the Plavix-killer co-developed with Daiichi Sankyo, seems to have plateaued below the $500 million mark, despite the multi-billion-dollar expectations for that drug. In August 2012, a head-to-head trial demonstrated no advantage for Effient over generic Plavix in acute coronary syndrome. That could kill Effient’s prospects for significant growth.

Lilly suffered other R&D failures in the past year, and the company can ill afford any more hiccups. There were so many that one analyst wondered if the company has pushed too many high-risk projects into late-stage development. (In drug development, as we know, there aren’t exactly a lot of low-risk candidates out there.)

Shortly after press time in July 2012, schizophrenia treatment pomaglumetad methionil washed out in one Phase II trial, and was dropped from development a month later, when a second trial’s results came in.

The company also stopped development of enzastaurin in May 2013, after a poor showing in a lymphoma trial. Tabalumab, a MAb that came over with Lilly’s 2008 purchase of ImClone, failed to show efficacy in Phase III trials against rheumatoid arthritis (RA) in February 2013, but the company will continue to pursue it as a treatment for lupus. In January 2013, development partner Bristol-Myers Squibb gave up its rights to another ImClone candidate, necitumumab. No official statement, but the drug had safety issues in one Phase III trial.

Lilly did receive Fast Track status from the FDA for another ImClone-derived drug, ramucirumab, to treat gastric cancer. Royalties from Erbitux sales added up to $397 million in 2012, so it would help if ImClone’s pipeline started to help pay off its $6.5 billion purchase price.

Lilly had better fortune with its oral JAK1/JAK2 inhibitor for RA. In June 2013, the company posted positive results from a Phase IIb trial of the drug, which is being co-developed with Incyte Corp. The study showed that clinical improvements observed in week 24 of the trial were maintained through 52 weeks.

Lilly’s most publicized failure — Alzheimer’s disease (AD) treatment solanezumab — is another sign that the company is swinging for the fences. In December 2012, the company announced it would keep working on solanezumab, despite trial results that would not support a BLA filing. Lilly will start a new Phase III trial in patients with mild AD beginning in 3Q13, in hopes of finding a patient population that benefits from this treatment to block beta-amyloid plaques. In June 2013, the company had to cancel another AD treatment in Phase II, due to toxicity issues.

That leaves evacetrapib as the big potential blockbuster in Lilly’s pipeline. A CETP inhibitor that raises HDL cholesterol while reducing the LDL variety, evacetrapib could be a huge seller for Lilly, or it could meet the same fate as Pfizer’s torcetrapib and Roche’s dalcetrapib. The company began a trial of evacetrapib in high-risk vascular disease in 2012 in collaboration with the Cleveland Clinic. At a recent healthcare conference, a Lilly speaker said that there will be an update on the key Phase III trial later this year.

After all of its R&D mishaps, the company’s historical focus on diabetes has become even more critical to its future. Lilly and development partner Boehringer Ingelheim submitted their oral SGLT2 inhibitor, empagliflozin, to the FDA in March 2013. The drug managed to control glucose and sustain weight loss, but will be playing catch-up with J&J’s Invokana if it gets approved in early 2014.

Lilly plans to submit dulaglutide, a once-weekly treatment for type 2 diabetes, sometime in 2013. That drug is meant to take on Sanofi’s top-seller, Lantus, which is only formulated for daily use, and also showed positive results against Byetta and Januvia. Another trial will test it against Novo Nordisk’s Victoza.

Lilly also has an insulin glargine drug (LY2963016) that may qualify in Europe as a biosimilar of Lantus, giving it a quicker path to the market than if it was submitted as a new drug. In January 2013, Boehringer Ingelheim relinquished its interest in a basal insulin product (LY2605541) from the companies’ development pact. Lilly is forging ahead with that drug, and will continue all of its pre-planned clinical trials. That’s another high-risk move, since a similar product from Novo Nordisk was rejected by the FDA, pending an extensive safety trial. If it hits, it could be big, but that’s how we got into this mess.

Lilly’s optimism about diabetes also stretches into its insulin manufacturing operations.. The company plans to add two insulin cartridge-filling lines and boost its insulin API capacity at its Indianapolis-based facilities with a $320 million investment. Previously, the company only filled insulin vials in the U.S., but the market has shown growing interest in injection pens. When complete, Lilly’s expansion will employ 175 people.

Thanks to that Cymbalta extension, Lilly got a six-month reprieve on D-day, but time is running out. It’s admirable that the company is sticking with Alzheimer’s disease, but by the end of the decade, Lilly might resemble Novo Nordisk, a high-powered diabetes company with a few interesting side programs.

Lowe Down
Doom and gloom has been the theme for these notes on Lilly over the past few years, with occasional updrafts all the way up into mere pessimism. And it’s hard to make the case for anything different this time. The company’s valiant, praiseworthy, and thus far utterly unfulfilling quest to treat Alzheimer’s has continued, with its beta-secretase inhibitor dropping out of Phase II before we could even find out if it worked or not. That comes after a valiant and not-so-praiseworthy attempt to persuade the world that its Alzheimer’s antibody trials really did work, despite every appearance of having done no such thing.

The company’s making strong efforts in oncology and diabetes, but none of these are going to make the upcoming losses of Cymbalta, Humalog, and Evista easy to take. The best case you can make is that things are going to be really nasty for a while until the newer drugs kick in. And the worst case, well . . . let’s not dwell on that one, OK? But without some headlines within the next year about drugs that actually work in Phase II and Phase III, Lilly and its investors are going to experience it. Thus the focus on Alzheimer’s — just one semi-efficacious approved drug there might turn things around. But what are the odds?

—Derek Lowe

Headcount: 38,080
Pharma Revenues:  $22,608 (4%)
Total Revenues: $24,287 (5%)
Net Income: $4,348 (-14%)
R&D Budget :$5,021 (3%)

Top-Selling Drugs

Account for 86% of total pharma sales, up from 83% in 2010

PROFILE
Lilly got a taste of Life Without Zyprexa at the end of 2011. Its top seller when generic in the U.S. at the end of October, leading to a quarterly sales drop of 44%, shedding nearly $600 million in revenues. In 1Q12, Zpyrexa sales fell 56%, a $700 million drop year-on-year. Quarterly revenue was down 4%. Combined with the 2010 loss of Gemzar, it’s quite a hit.

In our inaugural edition of the Top Companies report (July/August 2001), Lilly’s profile began, “For several years, Lilly has been preparing for the loss of patent protection for Prozac. [. . .] Lilly has begun to prepare for the post-Prozac era, which the company ominously refers to as ‘Year X’ in its corporate communications.”

Lilly survived the precedent-making collapse of Prozac —80% conversion to generic within a week, according to one metric, and a 66% drop in revenue after one year — with a series of new drug approvals and deep cuts. With a number of those new drugs now facing expiration, including #2 seller Cymbalta, the company is referring to this period (2010 through 2014) as ‘YZ,’ short for ‘Year Zero’.

In chief executive officer John Lechleiter’s letter to shareholders in Lilly’s 2011 annual report, he writes, “Our strategy for YZ is to continue to grow sales volumes of our currently marketed products, harvest the fruits of our investments in our counter-cyclical growth engines, and supplement our internal growth with business development — while improving productivity. This will allow us to fund our innovation-based strategy and, specifically, a pipeline that can deliver long-term growth.”

Dr. Lechleiter, a 32-year veteran at Lilly, also noted, “Our company is not shifting its focus to generics or consumer products. And we’re not pursuing a big merger.” The company is sticking with its “R&D Do or Die” mentality (along with a healthy dose of general cost-cutting, last seen in a 2009 restructuring that sliced $1 billion from annual costs, along with 5,500 employees; oh, and the remaining staff will have their base pay frozen for 2012).

Overall, the company exceeded its goals by having a dozen drugs in Phase III by the end of 2011, and its R&D efforts are high risk, high reward. Lilly’s biggest bet remains in Alzheimer’s disease, where solanezumab is currently in a pair of Phase III trials. If the drug can be shown to slow progression of the disease even mildly (and safely, unlike Lilly’s previous Phase III effort, semagacestat), it’ll be a blockbuster and help the company pass this hurdle. The company has tried to downplay the “all or nothing” notion that a clinical failure here dooms the company, but since when are pharma investors rational and immune to hype?

Speaking of, evacetrapib may begin Phase III trials in 2012 for dyslipidemia. This is another in the CETP inhibitor field, testing the thesis that raising HDL and lowering LDL will reduce cardiovascular events. Once again, Lilly is not raising anyone’s hopes that this will succeed where Pfizer’s torcetrapib and Roche’s dalcetrapib failed, but if it works . . .

Meanwhile, in the lucrative field of diabetes treatments, Lilly and development partner Boehringer Ingelheim got approval for Tradjenta, a DPP-4 inhibitor, and Jentadueto, a combo of Tradjenta and metformin. The companies also have a long-acting basal insulin that got good results in Phase II and may give Lantus a run if it reaches market. Phase III data for that drug is expected next year.

Lilly’s erstwhile partner Amylin got approval for its weekly GLP-1 inhibitor Bydureon. As part of the process of becoming erstwhile, Lilly received a one-time payment of $250 million from Amylin and will receive 15% of net sales of Byetta and Bydureon, until the $1.2 billion mark is reached (on a note to Lilly paying 9.5% interest). Lilly will also get a $150 million milestone payment if Amylin’s once-monthly version of the drug gets approved. That’s quite a deal, considering Amylin was suing Lilly over the terms, and not vice versa. When BMS acquired Amylin shortly before press time, it included debt and contractual obligations to Lilly of $1.7 billion in its $7.0 billion valuation.

Biologics, including insulin products, will play a big role at Lilly going forward. On the operational side, Lilly announced plans in February 2012 to invest $442 million to expand its biopharma facilities in Kinsale, Ireland. The company spent $400 million there in 2006 to get biologics off the ground.

In that first Top Companies issue in 2001, Lilly was ranked #11 overall. Two companies that were ahead of it were bought up over the years — Pharmacia, American Home Products (Wyeth) — while Lilly passed a third — BMS — to take hold of its #8 spot. The company managed to hold its ground despite the bruising loss of Prozac, but can it survive the next few years without becoming M&A bait? A poison pill provision can help ward off hostile takeovers, but will Lilly’s revenue base dip too far for it to sustain R&D? That’s the $64 billion (or thereabouts) question.

Headcount: 38,350
Pharma Revenues: $21,685 (5%)
Total Revenues:$23,076 (6%)
Net Income: $5,070 (17%)
R&D Budget: $4,884 (13%)

Top-Selling Drugs in 2010

Account for 88% of total pharma sales, same as in 2009.

PROFILE

These next few years are all about survival for Lilly. The company loses U.S. patent protection for top-seller Zyprexa in October 2011 ($2.5 billion in U.S. sales), followed by Cymbalta and Humalog in 2013. Those three drugs comprised 46% of the company’s total revenues in 2010. Cancer treatment Gemzar went generic in November 2010, leading to a 16% drop for the year and a 46% drop in 1Q11 revenues. The company is battling to keep patent protection for Strattera. By many accounts, Lilly faces the worst patent cliff of any company on our list.

In the years leading up to Zyprexa’s patent expiration, Lilly had been pinning some of its hopes on its Plavix-buster Effient. But delays in approval and a relatively slow market uptake left Lilly with $115 million in revenues in its first full year. There are some signs of promise, with the drug posting $56 million in Lilly’s 1Q11, but it’s a long way from becoming a blockbuster.

Lilly had a major pipeline disappointment when it had to halt development of Alzheimer’s treatment semagacestat after discovering in August 2010 that it was associated with worsening symptoms in some patients. The company (with partner Bristol-Myers Squibb) also had to stop enrollment in a Phase III trial of necitumumab as a first-line treatment for nonsquamous non-small-cell lung cancer, due to blood clot risk. A separate Phase III trial continues for treatment of squamous NSCLC. And a Phase III study of tasisulam in multiple myeloma was stopped after safety concerns arose. And then there’s the teplizumab Phase III trial in diabetes that missed its primary endpoint. And the once-weekly diabetes injection, Bydureon, received its third CRL in October 2010. Lilly and its development partners plan to resubmit by the end of 2011.

What I’m saying is that Lilly has a ton of valuable R&D programs going on, but has suffered a string of bad results, just when it can least afford them.

Industry analysts and experts have been clamoring for Lilly to make a major acquisition to buttress its revenue base for the years ahead, but the company has held off since its $6.8 billion acquisition of ImClone in 2008. Lilly put in an undisclosed bid for J&J’s animal health unit in March 2011, and the company did make a pair of smaller pharma acquisitions in the last year (see Acquisition News for more), but those haven’t panned out as well as the company hoped.
The application for liprotamase, the lead drug from the acquisition of Alnara, received a complete response letter from the FDA, asking for an additional clinical trial. Likewise, the NDA for Amyvid, the beta-amyloid plaque imaging agent that came over with the acquisition of Avid Radiopharmaceuticals, also got a CRL from the agency. This one was centered around the need to establish a reader training program to “ensure reader accuracy and consistency of interpretations of existing Amyvid scans,” according to a Lilly statement.

In January 2011, Lilly signed a diabetes co-development and marketing pact with Boehringer-Ingelheimer. The deal focused on two of Lilly’s basal insulin analogs and two of BI’s oral diabetes agents, with a BI option for Lilly’s anti-TGF-beta MAb. Lilly paid nearly $500 million to consummate the deal; BI is eligible for around $850 million in development milestones, while Lilly can achieve as much as $1.2 billion, if everything comes to fruition. BI’s Tradjenta was approved by the FDA in May 2011, and that’s where the story turns sour.

See, Lilly already has a diabetes marketing agreement with Amylin for Byetta, and Amylin didn’t think it was right for Lilly’s sales staff to begin selling a Byetta competitor. Amylin initially won an injunction against Lilly/BI’s tie-up, but a judge threw out Amylin’s claims, opening the door for Lilly to begin selling Tradjenta. It’s an ugly twist in the Lilly/Amylin relationship, but Lilly’s in a revenue bind, and Byetta seems to have maxed out its potential, bringing in $431 million in sales and collaboration revenue for Lilly in 2010 (-4%).

So what’s going right for Lilly? Well, they’re reducing their cost structure and headcount through restructuring and a plethora of outsourcing activities. Alimta’s patent protection was affirmed in court, saving Lilly from another multi-billion-dollar beatdown. Also, Cymbalta gained an added indication for chronic musculoskeletal pain, which should help that drug’s revenues grow in the double-digits (until 2014). Plus, most of the company’s Zyprexa lawsuits are behind it (and Lilly’s developing a new schizophrenia drug that gets around the weight gain/diabetes problems that Zyprexa and similar drugs caused).

Chief executive officer John Lechleiter predicted that the company will manage not to dip below $20 billion in total revenue, provided Lilly wins its Strattera patent case, but I don’t see how Lilly will generate enough new revenue in the next several years to offset the generic erosion it’s facing.

Longtime readers know that I’m sympathetic to Lilly’s FIPNet model, in which the company looks outside for many of the functions that were traditionally kept in house. It’s sad that a string of terrible pipeline results has put the company in such a bind.  —GYR

OUTSOURCING NEWS

In September 2010, Lilly formed a strategic partnership with Parexel for clinical research support and portfolio management in Asia-Pacific. That same month, the company expanded its outsourcing with i3 Statprobe. Lilly and i3 had been working together since 2008, when Lilly transferred much of its domestic data management work to i3, along with 80 staffers. The new partnership covers medical writing and biostatistical services.

In March 2011, Lilly and Advion expanded their relationship to allow Advion to conduct bioanalytical work. For more details on that partnership and the companies’ perspectives on it, please check out our Newsmakers Interview with Lilly and Advion!

ACQUISITION NEWS

Target: Avid Radiopharmaceuticals

Price: $300 million, plus as much as $500 million in milestones

Announced: November 2010

What they said: “The acquisition . . . aligns well with Lilly’s innovation-based strategy, offers a potential near-term revenue opportunity, leverages our neuroscience expertise and will immediately bolster our diagnostics capabilities.”

—John Lechleiter, Ph.D., chairman and CEO, Lilly

Target: Alnara Pharmaceuticals

Price: $180 million and as much as $200 million in milestones

Announced: July 2010

What they said: “The acquisition . . . provides Lilly with a promising entry into enzyme replacement therapy — an area with unmet medical needs as well as opportunities for novel compounds that give patients additional treatment options.”

—Bryce Carmine, executive vice president,

Lilly and president, Lilly BioMedicines

THE LOWE DOWN

Will I be the first person to write about Eli Lilly this year without mentioning the phrase “patent cliff”? Nope, blew it in the first sentence. But with Zyprexa saying good-bye later this year, and Cymbalta in 2013, that’s really the first thing to say. The company’s whole recent history has been about finding some way to deal with the disappearance of these revenue streams.

You can always cut costs, but how far does that get you? And at this point, haven’t they cut most everything that can be cut? It sure seems that way from outside. And you can always try to bring some new revenue in with an acquisition, but are there any deals out there that make much sense? Or any that will replace several billion dollars a year in sales?

No, Lilly seems to be settling in between in immovable rock and a very hard place indeed. It’s going to be a different-looking organization, one way or another, by the time it emerges. —Derek Lowe

Previous Profile: Johnson & Johnson // Next Profile: Abbott Laboratories

Headcount: 39,380
Pharma Revenues: $20,629 (+5%)
Total Revenues: $21,836 (+7%)
Net Income: $4,329 (-5%)
R&D Budget (pharma only): $4,327 (+13%)

Account for 88% of total pharma sales, up from 86% in 2008.

PROFILE

Lilly chief executive officer John Lechleiter has given several speeches in the past year on the “innovation crisis,” stressing the importance of Collaboration, Competency and Culture in restoring growth in the biopharma arena. Mr. Lechleiter’s could certainly do with some revitalization in the next few years.

Lilly and partner Daiichi-Sankyo finally got FDA approval for anti-platelet drug Effient in July 2009, but now comes the hard part: building the market. Effient’s approval included a Black Box warning about significant bleeding risk and is covered by a REMS, and it’s only indicated (for now) to reduce heart attack risk in patients who have undergone angioplasty, so Effient has a lot of work ahead — with regulators, physicians and payers — to live up to its blockbuster hype.

Pharmacy benefits manager Medco Health Solutions has is conducting its own head-to-head study of Effient and Plavix, to determine outcomes among patient groups. An earlier study will be conducted to weed out the recently identified patient group that metabolizes Plavix poorly. Since Plavix will be off-patent soon, the trial could put a crimp in Effient’s growth if Medco determines there’s little difference between the drugs among the “good metabolizers.” Medco may think that Lilly’s head-to-head trial against Plavix included poor metbaolizers, dragging the Plavix group’s numbers down.

Running To Stand Still

In theory, there’s still time for Effient to grow into a blockbuster, but in practical terms, Lilly needs to replace a huge amount of revenues in the next few years. Gemzar — already under attack in some countries — loses U.S. patent protection in November 2010. Top-seller Zyprexa goes generic in the U.S. after 2011, followed by Cymbalta and Humalog in 2013. Those four drugs comprise more than half of Lilly’s 2009 revenues. It’s a good thing cancer medication Alimta is going gangbusters, but Lilly has stated that it expects annual revenues for the 2012-2014 period to be “at least” $20 billion, which means it’s going to be treading water at best for the next four years.

To help deal with the impending crash, Lilly announced a restructuring plan in 4Q09 to reduce its cost base for the rough times ahead. The company reorganized around five units: units cover oncology, diabetes, established markets, emerging markets and animal health. “Established markets” covers both geography and certain therapeutic classes, while “emerging markets” refers solely to geographical regions. By the end of 2011, Lilly will shed 5,000 jobs (around 12% of its workforce) and reduce its cost structure by $1 billion, if all goes according to plan.

Lilly also plans to establish a Development Center of Excellence to “help address the industry-wide challenge of a drug development process that is increasingly complex, slow and expensive,” according to a company statement. The CoE will use “one common operating system, one common set of priorities and a singular focus to streamline the development of new medicines,” the statement noted.

On the R&D end, Lilly plans to have 10 molecules in Phase III by the end of 2011 and hopes to launch two new drugs annually beginning in 2013. (I’m putting this in print so we can look back in a few years and see how that panned out.) For now, Lilly gained approval for an extended release version of Zyprexa, got Byetta approved as a monotherapy, and bought co-promotion rights to Livalo, a new statin (!?!) developed by Kowa, but the company’s hopes for expanding Cymbalta into the chronic pain indication has been booted down the road by the FDA.

The agency also sent Lilly (and partners Amylin and Alkermes) a complete response letter for the NDA for a weekly injectable of Byetta, to be marketed as Bydureon. FDA was concerned with manufacturing processes, labeling and a REMS. Bydureon may not save the company’s hopes — Byetta brought Lilly $448 million in 2009 revenues — but it can help extend the franchise in the brutally competitive diabetes market.

In addition to the Kowa partnership, Lilly also bought a global license to sell Axiron, a testosterone cream currently under review with the FDA. The deal, which included $50 million in upfront payment, can potentially reach $335 million, plus royalties. Lilly also inked a (potential) $755 million pact with Incyte for an oral RA treatment currently in Phase II.

Last year, a few weeks after consummating Lilly’s imClone acquisition, Mr. Lechleiter told an interviewer that he “got hungry again” for more acquisitions. With Z-Day (for Zyprexa) approaching, I have a feeling Lilly will be more focused on circling the wagons and trying to stave off a takeover in the next year or two.

Return to Top Pharma Report homepage.

Headcount: 40,450
Pharma Revenues: $19,285 (+9%)
Total Revenues: $20,378 (+9%)
Net Loss: $2,072 (n/a)
R&D Budget: $3,841 (+10%)

Account for 88% of total pharma sales, up from 87% in 2007.

PROFILE

Last year, we wrote about Lilly’s waiting game for approval of Effient, the drug that could go after some of Plavix’s nearly $9 billion market share. At the time, the FDA had booted the PDUFA deadline to September 2008. Nine months have passed from that deadline, and Effient (trade name: prasugrel) is still in limbo in the U.S. In February 2009, the drug was approved in the EU for prevention of atherothrombotic events in patients with acute coronary syndrome undergoing percutaneous coronary intervention. An FDA panel unanimously recommended Effient that same month, after examining data from a trial that pitted Effient head-to-head against Plavix, but the agency has no deadline set for its decision.

Zyprexa remains Lilly’s top seller, but also its top worry. Sales of the atypical antipsychotic drug were $4.7 billion last year (-1%) and were flat in 1Q09 at $1.1 billion, and the company can’t escape its legal woes tied into Zyprexa’s marketing. As we wrote last year, the company made a $1.2 billion in payments to settle approximately 30,000 Zyprexa lawsuits tied to diabetes complications. In January 2009, the company pled guilty to a misdemeanor charge and paid out another $1.4 billion to the Department of Justice and various states for promoting Zyprexa for off-label purposes between 1999 and 2001.

The hits keep coming, unfortunately. There are still 12 states that are suing Lilly over Zyprexa’s marketing practices, while insurers and other third-party payors are suing the company for fraudulent marketing and are asking for $6.4 billion in damages. The main charge is that Lilly knowingly promoted Zyprexa as a treatment for dementia in the elderly, despite the fact that it proved to be of no benefit and may actually have increased the death rate in elderly patients in a clinical trial. There are marketing documents and e-mails that look incredibly damaging to Lilly’s reputation, although the company contends those items have been taken out of context by the plaintiffs and the press.

Oh, and a generic version of Zyprexa is on the market in Germany. Its U.S. patent expires in 2011. Lilly is waiting for U.S. approval of a Long Acting Injection version of the drug for treatment of schizophrenia, pending the agency’s evaluation of its Risk Evaluation & Mitigation Strategy (REMS) document.

Meanwhile, Cymbalta is growing by leaps and bounds (+28% for FY08 and +17% in 1Q09), gaining new approvals for pain indications and adding prescriptions. In June 2009, the company resubmitted an SNDA for treatment of chronic pain, which could help drive Cymbalta sales through the roof. It got approved in the EU in 2008 for treatment of generalized anxiety disorder and is being studied for the delaying of depression episodes. I hate to sound skeptical, but I admit it worries me when a treatment starts branching out in so many fields like this, in light of the preceding paragraphs.

Lilly made a bold move by going after ImClone late last year, bidding up the company to $70/share and putting it out of reach of development and marketing partner Bristol-Myers Squibb. The $6.5 billion acquisition gives the company a share in moneymaking biologic Erbitux, as well as a biomanufacturing facility that’s been described to me by more than one source as “the Bio-Taj Mahal.”

While Erbitux revenues are tied into marketing deals with BMS (U.S./Canada) and Merck Serono (everywhere else), and there’s some debate over who has marketing rights to Erbitux followup IMC-11F8, Lilly will have more control over the next round of drugs in ImClone’s pipeline. At a December 2008 Wall Street presentation, the company showed that, with the addition of ImClone, a full 40% of the Lilly pipeline consists of large molecule drugs.

In a Financial Times interview in March 2009, Lilly chief exec John Lechleiter said that he “got hungry again about three weeks after ImClone got closed” and is on the lookout for more acquisition targets. Dr. Lechleiter explicitly crossed peer BMS off the list, stressing that Lilly’s acquisition range was $5 to $15 billion. Given Lilly’s financial position and the overall market trends, one would have to assume they’ll look at more stressed biopharmas. A few years ago, you’ll recall, Lilly bought its Cialis development partner, Icos.

Lilly’s other acquisition last year came mere weeks after we closed the 2008 report. In July 2008, the company spent $64 million on SGX Pharmaceuticals. The companies had been collaborating since 2003 on X-ray crystallography and the buy gave Lilly access to SGX’s synchrotron as well as its preclinical oncology portfolio.

Lilly’s late-stage pipeline has some good prospects. If it can bring Effient to the U.S. market, get its long-acting version of Byetta and new osteoporosis treatment Arzoxifene approved, and get out from under the really dark cloud of Zyprexa’s marketing fraud, the company may find itself in a decent position to weather its patent cliff. And if it can use its $6 billion in cash to pick up some promising compounds or late-stage development companies, it might get through the next few years alright.

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#9 Lilly

Lilly Corporate Center, Indianapolis, IN 46285
Tel: (317) 276-2000 Fax: (317) 277-6579
www.lilly.com

Account for 87% of total pharma sales, up from 83% in 2006.

* First year of full share of Cialis sales, which were previously recorded by the Lilly-ICOS joint venture

PROFILE

Lilly posted the biggest sales growth among our top 10, and did so without the benefit of exchange rates. One of the keys to its 19% revenue growth was the incorporation of full Cialis revenues, which were previously split with Icos. But even dropping Cialis’ revenues to 2006 levels would leave Lilly with 13% annual growth, better than anyone but Roche, which benefited from the strong Euro.

So how did Lilly do it? By marketing the heck out of Cymbalta. The depression treatment zoomed past the $2.0 billion mark at 60% growth last year. It slowed down to a phenomenal 37% increase in 1Q08, helping offset deteriorating Zyprexa sales. Lilly needs to strike while Cymbalta’s iron is hot; the drug will lose patent protection in the U.S. in 2013, according to Lilly’s regulatory filings.

To that end, Lilly is trying to get Cymbalta cleared in a whole mess of indications. John Russell of the Indianapolis Star recently asked whether the drug had become a “Swiss Army knife,” after it was submitted to treat chronic knee and low back pain. Perhaps the new indications will help Lilly extend its patent protection for another year or two.

Zyprexa’s key patents will expire in 2011, but that drug is already slowing down, partly over concerns with side effects. Meanwhile, the company continues to face legal issues over off-label marketing of Zyprexa. Lilly has settled more than 30,000 lawsuits about diabetes complications arising from Zyprexa for $1.2 billion, and the company is allegedly negotiating with the U.S. government to make a $1.0 billion settlement for criminal and civil charges related to marketing. The FDA recently gave Zyprexa Injection a “not approvable” letter in its application to treat schizophrenia. Still, $4.7 billion in 2007 sales is nothing to sneeze at.

The company’s best hope for replacing that revenue in a few years lies with would-be Plavix-buster Effient (generic name prasugrel). Lilly and development partner Daiichi Sankyo had great (but still a little mixed) results in a head-to-head study of Effient and Plavix, so the companies had their symbolic fingers crossed in late June 2008 as their PDUFA priority review deadline crept up.

Unfortunately, the agency declared that it needed an additional three months to evaluate Effient’s NDA, putting a decision off until September 2008. The FDA made no mention of sending the application to an advisory committee, which is supposed to be a good omen, if you’re into agency tea leaves. Every day it’s delayed is another day fewer to convince doctors to shift patients from away from Plavix.

Lilly saw a big change at the top this year, as John Lechleiter ascended to the chief executive officer suite, replacing Lilly lifer Sidney Taurel. Dr. Lechleiter, a chemist by training reorganized management in May 2008 in an attempt at streamlining the company’s structure. In the Lilly Research Laboratories, the company has created a combined global regulatory, medical and patient safety organization. In International Operations, European infrastructure has been cut from four areas to two; Africa, the Middle East and the CIS have been combined with Asian markets (not including China and Japan); U.S. operations have been reorganized with two main groups: healthcare professionals and institution-based customers; the company’s global and international marketing organizations were also consolidated.

These changes notwithstanding, the company hasn’t made any new restructuring announcements. Restructuring costs dropped significantly in last year, at the tail-end of multi-year program that saw 5,500 employees fired and several facilities closed.

That said, Lilly announced in April that it will cut as many as 500 people from its manufacturing operations in Indianapolis. The affected site makes the API for Humalog, Humulin and Forteo. Dr. Lechleiter pointed out that most of the previous cuts took place through attrition, but that
the Indy workers would be offered packages to leave the company. No word yet on the charge that Lilly will incur for this move.

A few weeks after that announcement, Lilly completed the final phase of its new biotech facility in Indianapolis. The site consists of a 250,000-sq.-ft. pilot plant, a 10,000-sq.-ft. research support facility, and the recently completed 475,000-sq.-ft. R&D laboratory. The company also just broke ground on a $600 million expansion of a commercial biomanufacturing facility in Kinsale, Ireland.

Exhaling To Wait

Lilly made its name in insulin, and it still has a major presence in that arena. But the company is fortunate it didn’t get too far ahead of the curve in insulin delivery. Like several other of our top companies, Lilly was co-developing inhaled insulin. After Pfizer’s fiasco with Exubera, Lilly cut its losses and bailed on the AIR Insulin project with partner Alkermes. AIR was in Phase III, but Lilly chose to close out the program at a cost between $90 and $120 million.

Announcing the decision, the company stated that it was “not a result of any observations during AIR Insulin trials relating to the safety of the product, but rather was a result of increasing uncertainties in the regulatory environment, and a thorough evaluation of the evolving commercial and clinical potential of the product compared to existing medical therapies.”

Effient represents a huge question mark for Lilly. The company contends that its pipeline has never been this good, with 16 NMEs moved into trials in 2007. Lilly plans to bring two new drugs to market each year from 2011 to 2014, then three new ones per year after 2014, but it’s that stretch from now to Cymbalta’s 2013 expiration that they have to worry about.

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