Eli Lilly and Company
:Drug Development Strategy (A)
Introduction to the Pharmaceutical IndustryIn the mid 1990s
By the mid 1990s, annual worldwide pharmaceutical sales were around $250 billion, with roughly 80 percent originating in the industrialized G7 nations.
Top Blockbuster drugs targeted diseases of particular concern to industrialized nations.
U.S. Pharmaceutical Market by Therapeutic Category (1994)
Drug Category 1994 (US$ billions) 2000 Estimates (US$ billion)
% Change of Market Share
Cardiology 15.4(18%) 13.1(13%) (27)
Antibiotics 12.0(14%) 8.1(8%) (42)
Gastrointestinal 11.1(13%) 10.1(10%) (23)
Central Nervous System 6.8(8%) 13.1(13%) 62
Respiratory 5.1(6%) 8.1(8%) 33
Lipid Lowering 4.3(5%) 5.0(5%) 0
Cancer 4.3(5%) 7.1(7%) 40
Diabetes 3.4(4%) 4.0(4%) 0
Arthritic 3.4(4%) 2.0(2%) (50)
Hematology 3.4(4%) 7.1(7%) 75
Imaging 2.6(3%) 2.0(2%) (50)
Anti-viral 2.6(3%) 3.0(3%) 100
Thrombotic 2.6(3%) 2.0(2%) 0
Immunology .86(1%) 2.0(2%) 100
Osteoporosis .86(1%) 4.0(4%) 300
Other 8.6(10%) 10.1(10%) 0
Total $85.6 billion (100%) $100.9 billon (100%)
Summary of Drug Development in the USA
Basic Research (about 2 years)
Pre-Clinical(Biological)Screening (about 3 years)
Human Clinical Trials (About 6 years)•Phrase I Safety Trials (1 year)•Phrase II Efficacy Trials (2 tears)•Phrase III Long-Term Efficacy Trials (3 years)
FDA Review (about 2-3 years)
Under current law, a patent’s term expired 20 years from the time the patent application was field (prior to 1995, patent protection extended 17 years after the patent was issued.)
Sales of only a few products could provide exceptional returns. In the mid 1990s, 14 products had annual sale over $1 billion, enabling profit margins of 15-20 percent.
Top 20 Prescription Drugs by Worldwide Sales (1994)(dollar in millions)
Rank 1994
Rank 1993
Product Name Product Type Marketer World Sales
% Change from 1993
U.S. Sales
1 1 Zantac Ulcer therapy Glaxo-Wellcome 3,663 12 2,2802 2 Vasotec/Renitec Hypertension treatment Merck 2,185 6 9753 4 Prilosec/Losec Ulcer therapy Astra & Merck 1,904 40 8504 10 Zovirax Herpes therapy Glaxo-Wellcome 1,729 49 4445 6 Prozac Antidepressant Eli Lilly 1,665 38 1,1806 3 Capoten Hypertension treatment Bristol-Myers Squibb 1,500 2 5817 5 Mevacor Cholesterol reducer Merck 1,345 3 1,1158 8 Adalat line Hypertension/Angina Bayer 1,300 8 1209 9 Cipro/Ciproxin Anti-inflective Bayer 1,300 8 712
10 16 Zocor Cholesterol reducer Merck 1,255 39 40011 11 Voltaren Anti-arthritic Ciba 1,192 5 26912 7 Procardia line Hypertension/Angina Pfizer 1,177 (3) 1,17713 12 Augmentin Anti-inflective SmithKline Beecham 1,126 (3) 49114 17 Sandimmune Immunosuppressive Sandoz 1,038 7 50015 14 Cardizem line Hypertension/Angina Hoechst Marion 933 2 81216 18 Rocephin Anti-inflective Hoffman-La Roche 930 4 41317 20 Premarin Estrogen replacement Wyeth-Ayerst 853 14 72318 23 Neupogen Bioresponse modifier Amgen 829 15 61719 22 Pepcid/Pepcidine Ulcer therapy Merck 820 12 62520 15 Ceclor Anti-inflective Eli Lilly 812 (11) 394
Top 20 Firms Active in the Pharmaceutical Industry (1994)(dollars in millions)
Company Total Sales
R&D Expense
EBIT Net Income
Return on Equity (%)
Return on Asset (%)
Employees (000s)
1 Bayer, A. G. 28,023 2,050 2,430 1,271 11.9 4.7 146.7
2 Ciba-Geigy 16,171 1,578 2,232 1,403 12.0 6.1 84.0
3 Johnson & Johnson 15,734 1,278 2,867 2,006 28.2 12.8 81.5
4 Merck & Co. 14,970 1,231 4,633 2,997 26.9 13.7 47.5
5 Bristol-Myers Squibb 11,984 1,108 2,638 1,842 32.3 14.3 47.7
6 Sandoz 11,639 1,199 N/A 1,272 20.7 8.9 60.3
7 Hoffman-La Roche 10,816 1,710 3,110 2,098 17.0 8.6 61.4
8 SmithKline Beecham Plc 9,933 976 1,213 110 12.4 0.9 55.4
9 Abbott Laboratories 9,156 964 2,228 1,517 37.5 17.8 49.5
10 American Home Product Corp. 8,966 817 2,145 1,528 35.9 7.1 74.0
11 Glaxo 8,484 1,287 2,826 1,955 25.2 16.1 47.4
12 Pfizer Inc. 8,281 1,139 2,003 1,298 30.0 11.7 40.8
13 Hoechst Celanese Corp. 7,794 313 (55) 186 5.9 2.3 29.2
14 Tekeda Chemical Industries 7,778 677 1,124 518 7.7 4.5 11.0
15 Eli Lilly and Company 5,712 897 1,828 1,286 22.1 8.2 24.9
16 Sankyo Co. Ltd. 5,575 477 887 395 11.3 5.8 N/A
17 Schering-Plough 4,657 620 1,281 922 58.6 21.3 21.2
18 Rhone-Poulenc Rorer 4,175 611 547 341 21.0 7.6 22.1
19 Wellcome Plc—ADS 3,096 542 1,098 632 22.1 14.4 17.6
20 Marion Merrell Dow Inc 3,060 462 632 438 20.5 10.6 9.4
Eli Lilly and Company
Eli Lilly and Company was found In Indianapolis, Indiana in 1876 by Colonel Eli Lilly.
In the mid 1990s, Lilly, operating in 150 countries, was one of the world’s largest pharmaceutical
company, with over 25,000 employees and 1994 sales of $5.7 billion.
Eli Lilly and Company- Organization Chart
A. M. Watanabe, MDExecutive VP Science &
Technology
Chairman and CEOR. L. Tobias
VP, HumanResources
Executive VP,Finance & CFO
VP & GeneralCounsel
President& COO
VP, Cardiovascular
VP, Endocrinology
VP, Cancer
VP, CentralNervous System
J. Schaus, PhD, SeniorResearch Scientist
VP, Regulatory Affairs
VP, Development
VP, Medical(Phases II & III)
CNS BusinessUnit
Bianca Sharma,Project Manager
Eisenstein, MDVP Technology Core &
Infectious Disease
M. Haslanger, PhDExecutive Director,
Research TechnologyAnd Proteins,
President, SphinxPharmadeuticals
S. Kaldor, PhD, Head ofCombinatorial Chemistry
Eli Lilly and Company-1994 Financial Highlights(dollars in million)
1994 1993 % Change
Net sales 5,712 5,199 10
R&D expenses 839 755 11
Income from continuing operations 1,185 465 155
Net income 1,286 480 168
Earnings per share
Income from continuing operations 4.10 1.58 159
Net income 4.45 1.63 173
As adjusted
Net income 1,398 1,336 5
Net income per share 4.84 4.54 7
Dividends paid per share 2.5 2.42 3
Capital expenditures 577 634 (9)
Income from continuing operation as
a percent of shares 20.7% 8.9%
Return on assets 11.8% 5.2%
Return on shareholders’ equity 25.9% 10.2%
Eli Lilly and Company-Major Product Sales(dollars in million)
DrugCategory
1994 Sales1994Sales
% of TotalLilly sales
LunchYear
Prozac Antidepressant 1,665 29 1988
Ceclor Antibiotic 812 14 1979
Humulin Diabetes 665 12 1980
Axid Gastrointestinal 487 9 1988
Vancocin Antibiotic 249 4 1958
Humatrope Growth Hormone 226 4 1987
Keflex Antibiotic 140 2 1971
Lorabid Antibiotic 129 2 1992
Innovation in the new DrugDevelopment Process
Synthetic ChemistryMade possible the development of compounds never before seen in nature, including more powerful and potent variations of naturally occurring compounds
Combinatorial chemistryEnabled a large collection or “library” of related chemical compounds to be quickly generated simultaneously
High-throughput screeningWas aimed at solving problem. Using this technology high-speed robots would perform a series of biological tests or “assay” on all member of a chemical library virtually simultaneously.
Combinatorial ChemistryAt Lilly
Combinatorial chemistry is an emerging technology for generating a large collection or “library” of related chemical compounds rapidly, instead of having to make one compound at a time. This allows for creating variations around the backbone of a basic molecular structure.
Combinatorial Chemistry (the “Split-and-Mix” Method)
Round Vessel 1 Vessel 2 Vessel 3 Number of Compounds
1 A B C 3(=31)
2 AD, BD, CDADG, BDG, CDGAEG, BEG, CEG
AE, BE, CEADH, BDH, CDHAEH, BEH, CEH
AF, BF, CFADI, BDI, CDIAEI, BEI, CEI
9(=32)
3 AFG, BFG, CFG AFH, BFH, CFH AFI, BFI, CFI 27(=33)
… … … … …
K … … … (=3K)
Central Nervous System(CNS) Diseases
CNS Diseases accounted for roughly 10 percent of all lifetime years lost to disease.E.g. clinical depression, severe insomnia(sleeplessness), and migraine
Each of which affected over 10 percent of the population – could take a severe toll on society. For instance, depression might predispose people to suicide
Lilly’s Migraine Project
“Migraine”
• was characterized by unilateral pulsating headaches often severe enough to restrict physical and mental activity
• afflicted 12 percent of population, with a 3:1 preponderance in women
Imitrex,• launched in 1992• was a mildly effective drug that act by constricting blood vessels• had an adverse effect on the heart’s vessels
Many scientists felt that the makers of Imitrex had followed the wrong path by trying to find a compound that constricted blood vessels(known as “vasoconstriction”).
By March 1994, out of over 1,000 previously synthesized serotonin-like compounds one particularly good “lead” had been found. In addition, Lilly’s experiments in which lab animals were administered these lead compounds further promise of the “1f” serotonin receptors as treatment targets for migraine without the need for inducing vasoconstriction.
4000-
2000 BC
• Ancient Egyptians develop compresses around skull to stop migraines.
1876
•Eli Lilly founded in Indianapolis, Indiana by Colonel Eli Lilly
1970s
•Early research in Lilly on serotonin
Timeline
1988 • Prozac launched to market
1991
•Serotonin “1f” receptor cloned by Lilly’s collaborator, Synaptic Pharmaceutical Corporation
•CNS group starts screening serotonin like compounds from Lilly’s historical library
1992
•Glaxo launched sumatriptin (Imitrex)
1994
•March/April•“Hot” lead compound found from
the screen with good fit at the serotonin 1f receptor
•Kaldor gives combinatorial chemistry seminar to an in-house audience at Lilly
•March/June•Improvement upon this lead made
using traditional chemistry•September
•Sphinx acquired•December
•Schaus presents seminar on his research to other CNS research group leaders
1995
•February•PTAC
(Project Approval Committee) meets to discuss strategic choices in migraine project
2001
•Projected launch, if approved, of Lilly’s migraine product
2003•Patent
protection of Prozac ends
Difficult choices:The Project Team Advisory Committee(PTAC) Meeting
The three key business issues for PTAC Presentation
Issue 1: Time to Market
Issue 2: Diversity of
Leads
Issue 3:Traditional or
Combinational Chemistry?
Member of the group
วริ�ษฐา ภิ�ริมย์ริ�ตน์ 4902680521 ณั�ฐกาน์ต ม�สั�ตย์4902682055
อั�จฉริา บั�ญชากริ5002686094 หฤษฎ์ พริริณัพาน์�ช 5002686185
Top Related