Eli Lilly to cut jobs and restructure in cost reduction plan
Drugmaker Eli Lilly & Co is to cut 5,500 jobs, or 13.5% of its workforce and reorganise into five business units by 1 January 2010 in an effort to reduce costs and speed up the development of potential new drugs.
Drugmaker Eli Lilly & Co is to cut 5,500 jobs, or 13.5% of its workforce and reorganise into five business units by 1 January 2010 in an effort to reduce costs and speed up the development of potential new drugs.
The Indianapolis firm said the restructure is also an attempt to protect itself from generic competition on its key schizophrenia drug Zyprexa, whose patent expires in 2011.
Lilly plans to cut annual costs by US$1bn and reduce its global headcount to 35,000 from 40,500 by the end of 2011. The new total excludes any strategic sales additions in high-growth emerging markets and Japan.
The company will reorganise its pharmaceutical business into four units of oncology, diabetes, established markets and emerging markets. They will operate alongside the Elanco animal health business division.
John Johnson, currently chief executive of ImClone Systems, purchased last year by Lilly for US$6bn, will head the oncology business unit. Enrique Conterno, currently president of Lilly USA, will lead the diabetes business unit.
Bryce Carmine, currently executive vp of global marketing and sales, will lead the established markets business unit.
Jacques Tapiero will lead the emerging markets business unit. Tapiero is currently Lilly's president of the intercontinental region.
Jeffrey Simmons will remain as president of Elanco.
The company also said Tim Garnett and Tom Verhoeven will lead a Development Center of Excellence within Lilly Research Laboratories. Garnett will have responsibility for medical, regulatory, global product safety, translational medicine and global health outcomes. Verhoeven will head the clinical development organisation, product r&d, toxicology/ADME and project management.
These appointments will come into effect on 1 November.
"We remain confident that continued focus on medical innovation is the best way to ensure the long-term growth of our company," said John Lechleiter, chairman and chief executive of Eli Lilly & Co. "While our financial performance during the past few years has been strong, we will soon enter the most challenging period in our company's history."
"This calls for strong measures to speed our output of new medicines, better meet the changing needs of our customers and reduce our costs," he added.
Lechleiter said Lilly's promising pipeline of early- and mid-stage molecules offers the best possible opportunity for sustainable long-term growth.