Both Merck and Eli Lilly were in the news today as two companies extremely revenue challenged due to expiring drug patents on top sellers with replacments not ready for prime time to pick up the slack.
Merck CEO, Ken Frazier, maintained that he was pushing his licensing group to pick up the pace to help fill in pipeline gaps -- and indicated he thought this was the future of the industry. He said Merck would be looking for early stage deals and in particular was interested plumbing the hepatitis C arena for new opportunities. Merck is banking on its big bankroll in helping it see its was through this pipeline dip. See Fierce Biotech.
Lilly CEO, John Lechleiter, was more reduced to grasping at his pipeline to save him. Lilly announced today that it expected to see a $3 B revenue drop from loss of patent protection on Zyprexa as the generics moved in. Lechleiter continues to eschew big mergers and is banking on the 12 late-stage drugs Lilly has in its pipeline. This did not prevent a price hit to its stock today however. One big pipeline test that looms is for Lilly's Alzheimer's drug, solanezumab -- that's trial results should be shared in Q3. There is a lot riding on this and one wonders what might happen to Lechleiter's plan (or even Lechleiter) should some of these key dozen projects go down. See Fierce Biotech.
One must remember though that Hope is not a Strategy.
Posted by Bruce Lehr Jan 5th 2012.