With a long-term focus on the treatment of diabetes, where it pioneered injectable human insulin analogs under the Humalog brand and then moved into oral agents under the Actos name, Lilly has been widely recognised as a company that focuses its considerable $3.5bn a year, or over $12m a day, research effort on major challenges. Over the past few decades, it has variously successfully tackled the prevention of osteoporosis through Evista, the treatment of depression with Prozac and Cymbalta, schizophrenia with Zyprexa and pancreatic cancer with Gemzar, all of which contribute to steadily rising sales which topped $18bn in 2007. These achievements alone do not however set Lilly apart from a number of other successful companies who have similar track records in their own areas of chosen specialisation.
What has distinguished Lilly over the past decade has been its ability to maintain successful organic growth in an age of rapid change across the life sciences sector while all around it many major competitors have chosen the route of large-scale mergers and acquisitions. While the big deals across the pharma industry have been based on increasing scale and reach, and as a result, increasing R&D effort accordingly, Lilly has led an alternative strategy. Although the company is a significant investor in its own internal research activities, it has also been at the forefront of the move to alliance-based drug development.
From its first major foray into in-licensing ten years ago, Lilly has built a significant network of relationships across the life sciences ecosystem. The company has a dedicated function, Global External R&D, focused on managing alliances with a host of universities, biotech start ups and other pharmaceutical firms. With a well-honed ‘find-it /get-it / create value’ process driving the securing of new technologies and molecules, Lilly has become a reference model across the industry.
In addition, Lilly was at the forefront of the Open Innovation movement, supporting the foundation, in 2001, of Innocentive, the leading marketplace for problem solving across many sectors. Within a few years of initiating its in-licensing strategy, one third of the Lilly pipeline comprised molecules that had been brought into the firm from outside and maintaining this balance across the portfolio is a key priority.
Underpinning such visible activities within Lilly there is a deep innovation culture based on building leading edge scientific capability, using venture capital to seed early stage developments and strong project teams dedicated to following up development through to post launch and line extensions. Faced with the ever-present challenges of being in the media spotlight due to the nature of its activities, the company has also been keen to be as open as possible about its research and therapeutic impact of its products. Lilly was the first pharma company to publish clinical data online – a different and unusual approach for the sector, but one that gained significant appreciation from the medical fraternity.
Going forward, Lilly is starting to undertake limited acquisitions of companies with which it has developed long terms partnerships but this complementary to its continued focus on sustained alliance-based organic growth. With 16 new molecular entities in clinical trials in 2007, and 14 new launches slated for 2008, continued sales and margin growth from innovation is expected.
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