2010 R&D budget: $4.88 billion
2009 R&D budget: $4.32 billion
Change: Up 13 percent

Like most of the rest of the Big 10, Eli Lilly added a significant amount of money to its R&D budget last year. And like most of its fellow pharma companies, there's been no end of flak from frustrated investors who want to know when the payback will arrive.

Last year Lilly spent close to $5 billion on R&D, an 11 percent increase. This year the pharma giant says that it expects to keep spending at just about that same level. That doesn't mean, though, that there won't be cuts. Last December the pharma company said it would shutter its Singapore R&D center, laying off 130 people as the company cherry picked any promising programs that could be sent home to Indianapolis. And Lilly outlined a total of 5,500 job cuts back in 2009.

The pharma company had been staggered by the failure of semagacestat for Alzheimer's last August. The therapy not only failed to slow disease progression, patients actually got worse. Neuroscience, though, is one of the toughest development fields in the industry, and some companies are scaling back work in the field as they focus on more likely winners. Others like J&J, though, aren't retreating. And Lilly experienced another setback when its neuroscience chief, David Bredt, was recently lured away to take a starring role at J&J.

Lilly's board continues to support CEO John Lechleiter, a respected scientist who has steadfastly ignored pressure to pull off a major M&A deal. He's determined to weather the storm on his own terms, sticking by his R&D division as they search for new blockbusters to fuel the company for the next generation of drug development.

For now the company will focus considerable attention on Bydureon, its long delayed follow-up diabetes drug to Byetta that's being co-developed with Amylin and Alkermes. And there are new indications to explore for Cymbalta. But Bydureon continues to face flak at the FDA--regulators demanded a new QT study last fall and to add insult to injury, Lilly's own head-to-head study with Novo's Victoza demonstrated that the competing drug had better efficacy. Lilly capped last year off with news that it was suspending treatment in a late-stage study of the melanoma drug tasisulam after investigators tracked a dozen deaths in the trial.

Early in 2009 Eli Lilly and Bristol-Myers Squibb slammed the brakes on enrolling new patients for a Phase III trial of necitumumab after monitors detected a risk of blood clots among new and recently enrolled subjects. Patients who had already received two cycles of necitumumab in combination with Alimta and cisplatin appeared to have a lower risk of clots and could choose to continue the therapy. Another late-stage trial of the drug in combination with Gemzar and cisplatin is continuing.

No one is likely to be satisfied with Lilly's approach until some truly innovative new drugs actually make it all the way through to an FDA approval. Don't look for that anytime soon.