Eli Lilly Provides Strategic Update

Eli Lilly and Company outlined its plans to grow revenue and expand margins through the balance of the decade. The company expects to grow revenue with a first wave of product launches in diabetes, oncology and immunology followed by a second wave of potential launches in cardiovascular disease, Alzheimer’s disease, pain, and oncology. The company will focus on key geographies including the US, Japan, China, and other select markets.

“We are successfully moving from a challenging period of patent expirations to a period of resumed growth, led by diabetes, oncology and animal health,” said John C. Lechleiter, Lilly’s chairman, president and chief executive officer, in a company statement. “We are launching new products and competing more effectively. We also retain one of the strongest pipelines in our history. Our refined strategic direction gives us a blueprint that will provide greater focus for our research and commercial activities and help Lilly respond to an ever more challenging environment. In these ways and more, we’ll continue to create value for all our stakeholders while improving the lives of patients.”

Lilly will focus its internal research and development on the core areas of diabetes, oncology, neurodegeneration, immunology and pain. Lilly is also progressing with efforts to reduce the development time required to bring new medicines to patients. The company aims to turn revenue growth into even greater earnings growth by controlling costs and leveraging existing infrastructure. By driving productivity improvements across the value chain, Lilly expects to reduce total operating expenses as a percent of revenue to 50% or less by the end of 2018. Total operating costs are defined as the sum of marketing, selling and administrative expenses and research and development expenses. Lilly also expects to increase gross margin as a percent of revenue through greater utilization of existing capacity in areas including insulin and its biotech portfolio as well as ongoing productivity efforts.

Source: Eli Lilly and Company

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