Lilly turns attention to cancer drugs, biologics

There's no question that Eli Lilly has been beset by challenges as of late. In the next seven years Lilly will be faced with generic competition for drug that made up almost three-quarters of its 2009 revenue. Additionally, the company has been hit with R&D setbacks, including the discontinued development of a once-promising Alzheimer's drug in August. These issues have caused many outsiders to suggest that Lilly would benefit from a major acquisition--a path many of its competitors have taken.

But in an interview with The New York Times, CEO John Lechleiter insists that his company will go it alone, focusing on internal R&D efforts and cost-cutting rather than mega-deals. While the company has historically been known for its blockbuster psychiatric drugs like Prozac, Zyprexa and Cymbalta, Lechleiter plans to move the company's efforts to cancer and Alzheimer's drugs. Biotech is another major company focus; biologics make up about 40 percent of the 70 molecules in Lilly's pipeline, according to the Times.

Lilly has produced only one new drug--Effient--in the last five years. It's near-term pipeline can't make up for the patent cliff its facing, and the company's best hope lies in finding new uses for its existing medicines. In the meantime, Lilly plans to pour more money into R&D at the same time its rivals are cutting R&D spending in favor of licensing deals. "We'll see our way through the storm," Lechleiter tells the Times. "At a time when others say Lilly has to do a deal or Lilly has to go outside itself to solve its problems, we're resolutely focused on what we have to do inside the company to make the innovative medicines that are at the core of value creation for Lilly and patients. That's what we do."

- read the New York Times interview