Eli Lilly CEO John Lechleiter, despite a big recent setback with Lilly's Alzheimer's drug semagacestat in phase III, and a loss of patent protection over the next 7 years of drugs that represent 74% of its revenues, is sticking to his conviction that the company will "go it alone and focus on internal R&D" according to an interview appearing in the NY Times.
Lechleiter is adamnant that Lilly can retool through reorganization and cost cutting, and can avoid mage-merger mania exhibited by some key Big Pharma competitors. He plans to turn the company's attention toward development of treatments for Alzheimer's and cancer. He remains bullish on Lilly's internal R&D which has produced only one new drug, Effient, in the last 5 years and whose pipeline in many analysts view is lagging. Lagging to the point that some are predicting Lilly revenues to fall from their high of $23 B in 2010 to only $18.6 B by 2015. Lechleiter says they won't dip below $20 B even in their depths.
Many of Lilly's European competitors are projected to cut R&D spending by as much as 40% in the coming years. Lilly plan to increase internal R&D spending. Lilly already has the industry's highest ratio of research to revenue - 19.8% - so they are used to bucking the trend.
"We're trying to be realistic," said Lechleiter, "while maintaining a sense of optimism" Or perhaps, whistling in the dark.
Posted by Bruce Lehr October 1st 2010.
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