Lilly CEO: Looking for deals, but not megamergers

Eli Lilly CEO John Lechleiter (photo) hasn't budged from his vow not to pursue a megamerger, as many of the pharma's rivals have done. "We are not interested in a large-deal combination," the exec said at the Sanford C. Bernstein investor conference. Lilly (NYSE: LLY) has some tough years ahead, particularly between 2012 and 2014, when several of its major drugs go off-patent. But Lechleiter is committed to avoiding a big buyout and will rely instead on his company's pipeline to see it through the challenge.

Even though megamergers are off the table, Lilly is seeing an increased number of deals. Lechleiter noted that it can be difficult to decide on an avenue to pursue. While diversity is essential, Lilly will look to expansion in areas congruent with its animal- and human-health model, which includes companion diagnostics and drug delivery technology. "I think any diversification would have to be in an adjacent space," Lechleiter said. Additionally, the pharma will continue its biotech makeover; currently, 40 percent of Lilly's pipeline is made up of biologics, and the CEO sees a greater portion of its development efforts focused on biotech in the future. 

- read the WSJ report for more