Drugmaker Eli Lilly is to eliminate 5,500 jobs over two years and reorganize into five business units. The Indianapolis company said it will reduce its work force by nearly 14 percent, to 35,000 from the current 40,500, by the end of 2011. The new total excludes hirings in high-growth emerging markets and Japan. Lilly hopes to cut annual costs by $1 billion per year over the same time, and will organize itself into the following units: cancer, diabetes, established markets, emerging markets, and Elanco, its animal health business, reported Associated Press. The company faces a dearth of recently approved drugs, having received approval for only one new drug, blood thinner Effient since 2005. But, Lilly products like the anti-psychotic drug Zyprexa will lose patent protection starting in 2011, with three other drugs — antidepressant Cymbalta, Humalog insulin and cancer drug Gemzar — losing protection in 2013. CEO John Lechleiter believes the company’s best path to profit growth involves focusing on its early and mid stage drug candidates. Lilly’s drugs in late-stage development include potential treatments for cancer, multiple sclerosis, diabetes, and Alzheimer’s disease. Other treatments in the pipeline includes drugs for depression, alcohol addiction and osteoporosis. The company said it hopes to make some of the reductions through retirements and attrition, but couldn’t speculate on how many. It suggested most of the reductions will be in the U.S., including Indiana, where Lilly employs about 13,600 people.
Drug Giant Lilly to Cut 14% of Staff, $1B in Costs
The Indianapolis company said it will reduce its work force by nearly 14 percent, to 35,000 from the current 40,500, by the end of 2011. The new total excludes hirings in high-growth emerging markets and Japan.
September 15, 2009