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| Table of Contents |
| Intro and Overview |
| Introduction |
| Business Overview |
| Trends and Forces |
| Corporate Overview (cont.) |
| Key Trends and Forces |
| Competition |
Corporate Overview (cont.)
Upcoming drugs
- Forteo is another osteoporosis drug that is approaching blockbuster status, growing 19% to $709 million in 2007.[1] Unlike most osteoporosis drugs on the market, which only inhibit bone reabsorbtion, Forteo also promotes new bone formation.[2] The drug is usually reserved for advanced cases of osteoporosis since it requires expensive daily injections.[3]
- Effient is a blood thinner that Eli Lilly is jointly developing with Daiichi Sankyo Co., a Japanese pharmaceutical company.[4] A 2007 study compared it to the blood thinner Plavix by Sanofi-Aventis and Bristol-Myers Squibb and showed that Effient reduced heart attacks but increased risk of major bleeding -- for every 1000 patients on Effient, there were 23 less heart attacks but 6 more cases of major bleeding.[5] Effient is under priority review by the FDA.[5]
- Byetta belongs to a new class of diabetes drugs that is based on a compound from the saliva of the Glia Monster and is jointly developed by Eli Lilly and Amylin Pharmaceuticals. As the first and only drug of its kind on the market, Byetta increases the natural production of insulin, slows digestion, and reduces appetite, which all work to lower blood glucose.[6] Byetta's biggest advantage is that it is associated with weight loss, unlike most other diabetes drugs, which cause weight ; however, it is more likely to cause stomach problems and requires an injection.[6] Byetta sales grew by 51% to $331 million in 2007.[1] Eli Lilly, Amylin, and Alkermes are developing a long-acting-release (LAR) version of Byetta that is more effective and requires fewer injections, which is currently under Phase III trials and is expected to hit the market in 2009-2010.[6][3]
Business and Financial Metrics
2007 growth of 19% was mainly driven by increases of 60% in Cymbalta sales, 9% in Zyprexa sales, and 3% in both price hikes and favorable foreign exchange rates.[1][7]
Acquisitions
Eli Lilly is in talks with ImClone to buy 83 percent of the biotechnology company it does not own already for $6.1 billion, or $70 per share, beating Bristol Myers' rival offer of $62 per share.[10] ImClone makes the cancer drug Erbitux, which had sales of $1.4 billion in 2007.[11]
Key Trends and Forces
Pipeline Risks
For more detailed information on the FDA approval process, see also Clinical trials.
Lilly's two most promising drugs in development are Effient, a blood thinner that will compete with Bristol-Myers/Sanofi's Plavix, and Byetta LAR, a long-acting-release version of its existing diabetes drug Byetta.
Developing a new drug is a time-consuming and costly endeavor. Hundreds of thousands of candidate compounds must be screened to identify a handful of potential drugs, and even fewer of these candidate drugs are found to be effective at treating a disease. The drug must then pass strict safety standards in several series of clinical trials. The entire process of developing a new drug and bringing it to the market takes up to 10 to 15 years and on average costs $800 million.[12]
Even after years of research, drug formulas sometimes fail to be effective treatments or pose significant health risks, and millions of dollars of research must be abandoned. Such is the fate of Lilly's osteoperosis drug arzoxifene. The company announced in August, 2009, that it would abandon the drug after it failed to meet treatment goals and was plagued by significant side effects. Annual sales had been forecast by some analysts at $600M by 2015. [13]
Young Product Portfolio
Eli Lilly has one of the youngest product portfolios in the industry -- the company has $6.64 dollars coming from new products (those launched within the last five years) for every dollar lost from patent-expiring ones, compared to an industry average of only 77 cents.[14]
When a drug loses patent protection, generic brands of the drug can be made, breaking the monopoly that the brand-name drug originally possessed. Sales of the iconic antidepressant Prozac fell from peak sales of $2.8 billion in 2001 to a negligible amount (out of the company's annual reports) after its patent expired in 2001.[15] The patent for Zyprexa, Lilly's best-selling drug, expires in 2011.[16]
Generic Drug Competition
Eli Lilly, like all major pharmaceutical companies, constantly faces the threat of generic copies of its drug portfolio. When patents expire, generic copies can reduce the price of a drug to a mere fraction of the patented original. Even when patents still apply to its drugs, Eli Lilly must still for remain vigilant in looking for any generic competitors and incur legislative costs to enforce any patent breaches.
On December 4, 2008, Eli Lilly filed a case against two Indian companies, Aurobindo Pharma and Lupin, for patent violation of its antidepressant drug Cymbalta. The infringement case is Eli Lilly's sixth outstanding patent lawsuit in the US. [17]
Generic Drug Competition
Eli Lilly has been one of the most vocal pharmaceutical companies in speaking out against a government sponsored healthcare plan. Among the issues the company takes with the plan is the issue of suddenly giving coverage to a swath of previously uninsured individuals. Chief Executive John Lechleiter has voiced concerns over the quality and extent of coverage in a government healthcare plan, saying that there would be "limited coverage and delayed access" for the whole system as a result of government intervention. [18]
Lawsuits
In January of 2009, Eli Lilly pleaded guilty to charges that it illegally marketed Zyprexa for treating dementia in the elderly, an unapproved use. The company will pay a record $1.42 billion in fines, which includes the largest criminal fines the U.S. government has ever imposed on a company. The case began in 2002 and concerned misleading marketing practices in 1999.[19] (Read more about Eli Lilly's competition...)
References
- ↑ 1.0 1.1 1.2 LLY 2007 10-k pg. 21
- ↑ Wikipedia:Forteo
- ↑ 3.0 3.1 Cowen and Company. Therapeutic Categories Outlook. March 2008.
- ↑ Wikipedia:Prasugrel
- ↑ 5.0 5.1 Lilly's Prasugrel Is Granted FDA Priority Review.
- ↑ 6.0 6.1 6.2 Wikipedia:Byetta
- ↑ LLY 2007 10-k pg. 20
- ↑ LLY 2007 10-k pg. 40
- ↑ LLY 2005 10-k pg. 42
- ↑ Eli Lilly in talks to buy ImClone: sources.
- ↑ ImClone
- ↑ "2007 Pharmaceutical Industry Profile".
- ↑ [1]
- ↑ Tough Projections for Big Pharmas: Drug Revenues Don't Look Promising.
- ↑ Eli Lilly: Life After Prozac.
- ↑ LLY 2007 10-k pg. 13
- ↑ TradingMarkets. "Eli Lilly files suit against Lupin, Aurobindo in US." 4 December 2008
- ↑ Reuters. "Lilly, Merck oppose concept of U.S. Health Plan." 10 June 2009.
- ↑ http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=LLY%3AUS&sid=aOgHFAH8vV98
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