Edited from 'Letter to shareholders' - annual report
On the back of another challenging market place, Eli Lilly states that this was due to the intense pressures put on the pharmaceutical industry, such as the general struggle for people to afford the costs of health care and drugs in particular on a worldwide level. Other factors include an ‘aging population’ that is said to be ‘straining health care budgets’.
In addition, there has been a withdrawal of some antidepressants that have been associated with suicidal thoughts. The withdrawal of Merck’s painkiller drug Vioxx has highlighted a backlash of concerns over product safety and this in turn has made regulatory agencies more cautious.
Looking ahead, Eli Lilly will focus on its ‘innovation-driven’ strategy. ‘We chose to remain independent; to invest in R&D at the top of the industry with the goal of delivering a steady flow of innovative products; to build the capabilities to manufacture these products and market them effectively around the world; and to augment our own capabilities and resources through partnerships’, says chairman and chief executive officer, Sidney Taurel.
The company has built what it states as being ‘one of the most productive R&D organisations in the pharmaceutical industry’. It is currently readying a generation of molecules for the market and restocking its early-stage pipeline. It states that ‘unlike most of its peers’, it does not have any major patent expirations coming up in the next several years. Its strength in developing both small-molecule and large-molecule ‘biotech’ medicines is said to also distinguish Eli Lilly from most other major pharmaceutical companies.
The company has a number of ‘promising’ molecules in its near-term pipeline. Its application to market Arxxant has been submitted to the FDA. If approved, it would be the first pharmaceutical treatment for moderate to severe non-proliferative diabetic retinopathy, a microvascular complication associated with diabetes that can cause vision loss or, eventually, blindness. It is also studying Arxxant for the treatment of other serious complications of diabetes.
The company is also developing prasugrel, in collaboration with Sankyo, for acute coronary syndromes. It is comparing its effectiveness with that of the cardiovascular medicine clopidogrel in a phase III head-to-head study. The goal of this study is to determine whether prasugrel, a platelet inhibitor that works by preventing clots and its complications can do a better job reducing death, heart attacks, and stroke in high-risk patients undergoing coronary stent placement.
Enzastaurin for regulating tumour cell survival, and possibly for the treatment of non-Hodgkin’s lymphoma and other tumours is also being studied.
The company believes that it has the ‘right strategy for the future’. While many aspects of its business environment will remain ‘uncertain’, the key to success is stated as being ‘clear’. It is believed that ‘the winners will be those companies that consistently deliver innovative medicines valued by patients, providers and payers, and continually elevate its productivity and flexibility’.
Its strategic focus on innovation provides the platform from which to leverage its advances in life sciences. The company has begun to pursue the development of ‘tailored therapeutics’ through the application of new tools and technologies, such as pharmacogenomics and biomarkers, biological telltales like blood sugar levels in people with diabetes that signal specific diseases. ‘Establishing this new model will take years. To invest in this transformation, we must dramatically improve the productivity of our current business model’, concludes Taurel.
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Financial highlights: Eli Lilly, year ended 31 December
Sales ($ m)
R&D ($ m)
Net Profit ($ m)
Total Assets ($ m)
Diluted earnings per share ($)
Number of Employees
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Eli Lilly is a major pharmaceutical corporation which develops pharmaceutical products. The company has major R&D facilities in seven countries. Its R&D facilities are located in Australia, Belgium, Canada, England, Germany, Japan, Singapore, Spain, and the US. It conducts clinical research in more than 60 countries around the world. Manufacturing facilities are located in Brazil, China, Egypt, England, France, Germany, Ireland, Italy, Japan, Korea, Mexico, Pakistan, Puerto Rico, Spain and the US. In addition Eli Lilly operates 14 administrative, manufacturing and R&D plants in the US and Puerto Rico.
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