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Eli Lilly & Company : company profile

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Eli Lilly & Co is a leading global pharmaceutical company with a particular strength in neuroscience, diabetes and more recently oncology treatments. The group has enjoyed considerable success with anti-depressants such as Cymbalta, and is perhaps best-known for Prozac, a miracle drug which revolutionised the treatment of depression during the 1980s and 1990s. However, it has suffered steep declines in sales of these products as a result of patent expiries. Current top-sellers include diabetes products such as Humalog and Viagra rival Cialis. Unlike many of its main rivals, Lilly has no exposure currently to the over-the-counter consumer healthcare sector, but it does have a strong position in animal healthcare, where its Lilly Elanco division is the global #2.


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Lilly has spent the past couple of years reaping the rewards of strong performance by its drug development pipeline, which bolstered the company's position in neuroscience drugs, and helped it to establish a significant presence in other market sectors, notably oncology. However that burst of activity in the first part of the 2000s has slowed down, and the group will soon face intense competition from generic manufacturers. Its one-time lead product Zyprexa has been dogged for several years by claims that it can cause diabetes in some patients.

Eli Lilly has ploughed significant investment into its drug pipeline since 2001, and delivered nine important new products over the next few years at a time when most rivals were struggling to develop new pharmaceuticals. The depressive disorder treatment Cymbalta became Lilly's overall top-seller in 2012, with sales peaking at $5.08bn in 2013 following approval for several other forms of anxiety-related pain. However it began a steep decline the following year with the loss of US patent protection, and in Europe as well from 2015. In 2015 alone, revenues fell by more than a third to $1.03bn, with a further, but less steep decline in 2016.

Another former blockbuster neuroscience product was Zyprexa for schizophrenia and bipolar mania. Sales peaked in 2010 at just over $5.0bn, before slipping back after its patent expired at the end of 2011. Zyprexa faces intense competition in the market from rivals including AstraZeneca's Seroquel, Johnson & Johnson's Risperdal, and BMS's Abilify, and performance has also come under threat from repeated claims that the drug can cause diabetes. Lilly denied those charges, but in 2005 and 2006 made a number of agreements totalling $1.2bn to settle more than 30,000 federal and state lawsuits claiming diabetic side-effects. It agreed a final payment of $1.5bn to settle outstanding charges in 2008. The company was also accused of deliberately ignoring early indications of those side-effects, which it also denies. Lilly extended the life of its most valuable product with the introduction of variant Zyprexa Relprevv (or Zypadhera in Europe), delivered in the form of a longer-acting intramuscular injection.

The diabetes allegations were especially unfortunate because that is Lilly's second most important treatment segment. Lilly is the leading US manufacturer of products for the treatment of diabetes, with products including Humalog (now its top-selling product) and Humalin. It has recently lost rights to two other diabetes products. Byetta, which Lilly co-marketed outside the US on behalf of its developer Amylin, was lost in 2012 when the latter was itself acquired in 2012 by Bristol-Myers Squibb. Another diabetes treatment, Actos, was co-marketed in several countries on behalf of Takeda Chemical Industries; however sole US rights reverted to Takeda in 2006. Lilly continues to market the drug in some international markets. Lilly also only benefits from a share of Byetta's profits, not its revenues. In 2011, Lilly agreed a partnership with Germany's Boehringer Ingelheim to co-develop a range of new diabetes products. The first results from this arrangement were Jentadueto and Trajenta, launched in 2012 (combined sales $437m in 2016), followed by Jardiance (in 2014) and Glyxambi (in 2015). Lilly's most important new diabetes product is Trulicity, launched in 2015. Sales more than quadrupled in 2016 to $926m. Basaglar, launched internationally in 2015 and in the US in 2016, is a biosimilar competitor to Sanofi's global market leader Lantus.

The group is also developing a strong position in the oncology sector with cancer drugs Alimta, 2015 launch Cyramza ($614m in 2016) and former blockbuster Gemzar. In 2008, it strengthened its position by trumping an offer from BMS for biotech developer ImClone Systems, whose best-known product is Erbitux. Lilly agreed to pay around $6.5bn for ImClone, including the 17% holding already controlled by BMS. However the latter retained US marketing rights to Erbitux until 2015, when they reverted to Lilly. Cialis is best-known as the main rival to Pfizer's Viagra. An erectile dysfunction treatment, it was originally introduced in 2003 through a joint venture with ICOS Corporation. Lilly acquired partner ICOS for $2.1bn in 2006 to take full control of the drug. It will lose patent protection in the US at the end of 2017.

Another endocrinology product, Evista, has been successfully introduced for the treatment of post-menstrual osteoporosis, but its US patent expired during 2014. It was overtaken in 2012 by another osteoporosis product, Forteo (Forsteo in some markets), now a blockbuster with sales of $1.5bn in 2016. A new heart drug, Effient, co-developed with Daiichi Sankyo of Japan was launched in 2009 to compete against Plavix/Iscover, marketed by BMS and Sanofi. Sales were $535m in 2016, mostly in the US.

There are several other other neuroscience drugs within Lilly's portfolio. Strattera is a non-stimulant treatment for ADHD (or attention-deficit hyperactivity disorder) in children and adults. That old warhorse Prozac and its associated product Sarafem for pre-menstrual neurosis, continued to contribute to the group total, but sales have fallen dramatically from the $2bn reported in 2001. Another product, Symbyax, combines the active ingredients of both Zyprexa and Prozac, but has performed below expectations.

One major recent misfire was the drug solanezumab, developed as an important new treatment for Alzheimer's. Lilly had hoped for target sales in excess of $5bn. However test results during 2016 showed little measurable benefit to sufferers and the product was scrapped at the end of the year, at a write-off cost of $150m. More successful new launches were Taltz for psoriasis and Lartruvo for soft tissue sarcoma.

Other products include Ceclor and other anti-infectives and cardiovascular agent ReoPro. Xigris, a treatment for sepsis, was withdrawn in 2011 following disappointing test results. Other new products include Permax for Parkinson's Disease; and Yentreve for stress-based urinary incontinence. Amyvid is a new diagnostic agent for use in medical imaging of Alzheimer's. Axiron is a treatment for low testosterone.

Separate group subsidiary Elanco specialises in animal health products. It has expanded steadily through a series of acquisitions, including the rival division of Johnson & Johnson's Janssen in 2011. In 2014, the group agreed to acquire the animal health division of Novartis for $5.4bn. That deal, completed in early 2015, established Elanco as the global #2 in the market behind former Pfizer subsidiary Zoetis, with 15% share. Although it is strongest in the farm animal segment, its products for companion animals include flea treatments Trifexis and (outside the US only) Sentinel. Sales for 2016 were $3.16bn. Lilly plans to spin off the business as an entirely separate company before the end of 2018.


Group sales peaked in 2011 at $24.29bn before beginning a steady overall decline as a result of patent expiries, albeit with a few temporary rebounds. Having slipped to a low of $19.62bn in 2014, there was a 2% rebound in 2015 to $19.96bn. Net income rose 1% in 2015 to $2.41bn, having halved since 2013.

For 2016, revenues continued to improve, topping $21.22bn. Net income jumped 14% to $2.74bn. The US accounted for just over half of sales, with Japan contributing a further 10%.


Lilly is one of America's oldest drug companies, first founded in 1876 by Colonel Eli Lilly, a pharmaceutical chemist and Civil War veteran. Under Josiah Lilly, the founder's son, the company was a pioneer in the introduction of gelatin-coated pills in the 1880s and also one of the first companies to employ a full-time scientist to develop and test new compounds.

In the 1920s, the company acquired commercial rights to a process discovered by two researchers at the University of Toronto to isolate and purify insulin as a treatment for diabetes, until then a fatal disease with no effective treatment. It launched the first commercially available insulin product in 1923 under the name Iletin, and established its first international office in the UK in 1934. Along with several other US manufacturers Lilly mass-produced penicillin in the 1940s, and later broadened its involvement in antibiotics with the introduction of erythromicin in the 1950s. The company floated in 1950s under the control of Eugene Beesley, the first non-family-member to lead the business. Later, Ceclor, introduced in the 1970s, became the world's best-selling oral antibiotic, giving Lilly a leading position in that market for several years. The company also moved into cosmetics, acquiring Elizabeth Arden in 1971. (The business was sold to Faberge in 1987). However Lilly ran into several problems in the early 1980s as the patents on several of its antibiotics expired and it was forced to pull anti-arthritic drug Oraflex off the market after it was linked to patient deaths.

Two products helped to restore the group's fortunes. The company significantly strengthened its diabetes treatment portfolio with the launch in 1982 of Humulin, the first product to mimic the insulin produced naturally by normally functioning humans, and the first genetically engineered medicine to be marketed commercially. But the company's most successful product was Prozac, which represented a breakthrough in the treatment of clinical depression. Introduced in 1987, it worked by inhibiting the reabsorption of serotonin, a naturally produced chemical used by the brain to send signals between nerve cells. Prozac was not only effective against a wide variety of anxiety-related disorders, but was also far less toxic than earlier forms of antidepressants, significantly reducing the risk of overdosing as well as other side effects. As an added benefit, it caused patients to lose weight without actively dieting. Widely recognised as a miracle drug of the decade, Prozac became the world's most widely prescribed antidepressant, used by more than 35m people between 1988 and 2000.

However that success eventually led to a series of legal challenges from generic manufacturers, which led to the reduction of Prozac's patent term from 2003 to 2001. Sales of Prozac declined sharply as a result of competition, and the company suffered a further setback when its follow-up failed in clinical trials. Other products continued to perform well in the meantime, and heavy investment in research and development led to the introduction of a series of new products in 2003 and 2004.

John Lechleiter handed over the role of CEO at the end of 2016 to Dave Ricks, previously SVP & president, Lilly Bio-medicines. Ricks became chairman as well in 2017.

Eli Lilly was run by the founder's descendants until the 1950s. The family-controlled Lilly Endowment trust was established in 1937. It remains a shareholder and is one of America's biggest charitable donors, supporting community development, education and religious projects in the company's home state of Indiana.

Last full revision 23rd June 2016

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