Lilly to reduce pipeline costs by a third
pharmafile | December 17, 2008 | News story | Research and Development |Â Â lilly, restructureÂ
Lilly aims to reduce the cost of it bringing new molecules to market by a third.
The company's goal is to lower costs from $1.2 billion in 2007 to $800 million by 2010, by improving R&D productivity and reducing late-stage failures.
The new strategy was announced at Lilly's annual meeting for investors and is part of a series of changes aimed at "fundamentally transforming" the company.
Steven Paul, president of Lilly Research Laboratories said: "Our most recent estimate of $1.0 billion shows that we are making significant progress toward achieving this goal through our R&D transformation."
John Lechleiter, who was appointed Lilly's new chief executive in April said the strategy was aimed at "quickly and decisively" addressing the major challenges facing the pharmaceutical industry.
"We must respond to the demand for greater value among payer, providers and patients. We must also prepare for the wave of patent expirations that will come in the early part of the next decade," he said.
He said the company's clear vision of accelerating the flow of innovative new medicines would create value for stakeholders and improve outcomes for patients.
One of the steps Lilly has taken to improve productivity is the sale of its Greenfield Laboratories site to Covance.
The innovative $1.6 billion deal will see Covance will take control of Lilly's 450 acre early drug development site in Greenfield, Indiana, and 264 Lilly employees who work on the site will now for Covance.
In addition Lilly has created joint ventures and collaborations with businesses in both India and China.
Lilly's biotechnology strategy is also transforming the company. 40% of the company's molecules in clinical development are now biotech-based, and Lilly is ranked fifth largest biopharmaceutical company based on sales.
The companys $6.5 billion purchase this year of ImClone gave it access to the biotech company's blockbuster cancer treatment Erbitux.
The drug, which made $1.3 billion last year, is indicated for a variety of colorectal and head and neck cancers and is being studied in non-small cell lung, gastric and oesophageal cancers.
Lechleiter stressed Lilly is making changes to its business from a "position of strength".
Lilly's sales rose by 12% during the first nine months of 2008, and IMS have recently ranked the company in the top ten pharmaceutical companies globally according to sales.
Strong candidates in the pipeline include Prasrugel, being developed with Daiichi Sankyo and currently being reviewed by the FDA and EMEA for the treatment of acute coronary syndrome in patients undergoing percutaneous coronary intervention.
Exentatide once weekly for diabetes is due to be submitted for FDA approval in the first half of 2009.
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