Drug discovery and development

Eli Lilly

In today's pharma market, drug discovery and development has never been so important to the industry. But for global pharmaceutical giant Eli Lilly, the current pressures of R&D could well be the company's lifeline.

The concerns over Lilly's future have surfaced as the firm face up to the fact that over the next few years, the drugs that currently account for more than half of Lilly sales will lose patent protection.

According to market analysts, bigger competitors like Pfizer and Merck will turn to huge acquisitions to add new revenue sources as they, too, face patent protection loses. Lilly, on the other hand, is reportedly relying on its own pipeline of drugs currently in development.

Fill the gap

Company CEO John Lechleiter, who has been at the company for the last 30 years, is confident that the firm's pipeline will help the firm rebound from patent losses, much like it has before a previous three times in the past. He is also comforted by the firm's reorganization plans, announced last month, which aim to speed up drug development.

"I wish we could order up innovation and smooth out the inevitable ups and downs that patent expirations yield," said Lechleiter at a recent interview held in Lilly's Heritage Hall museum.

"We can't always do that. Instead we're trying to do focus on running the business the right way - through what we know is going to be a challenging period - and then do everything in our power to speed up the progression of those drugs that we reckon are going to make a difference early in the next decade."

Change

Of course, Lilly isn't alone in the good fight against generics - and, as such, the pharmaceutical industry is currently facing an increasing period of uncertainty. Change is coming.

For the likes of Pfizer, the colossal $68 billion merger with Wyeth - completed last week - is one way to overcome revenue gaps expected to come from the rise of generics. As such, many analysts are predicted that M&A could signal a massive new trend for the industry, while others, bolstered by an increased presence of Big Pharma in countries such as India and China have led to calls that "pharma-emerging" markets hold the key.

Meanwhile, for Lilly, Lechleiter explains: "We haven't given specific guidance about what we think we will or won't replace when, for example, our two best-selling drugs - the antipsychotic Zyprexa and the antidepressant Cymbalta - expire.

"But the point is whether we can launch new products that we think are capable of growing into drugs that have substantial enough revenue to help us offset these losses."

Drug discovery - not just for Lilly, but for Big Pharma in general - has never been so important. In short, the pharmaceutical industry is at a crossroads, and only by facing up to the gross challenges that lie ahead can Big Pharma truly secure a healthy development.

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