Lilly pessimistic on 2012 performance
Lilly is forecasting a drop in revenue and profits for 2012, as it prepares for life without its blockbuster antipsychotic Zyprexa.
Zyprexa (olanzapine) is licensed to treat schizophrenia and bipolar disorder and is Lilly’s biggest selling drug, bringing in $5 billion in 2010.
But the drug lost its patent in most major markets in October, and Lilly is predicting that generics will decimate sales, which it says will plummet by $3 billion in 2012.
To make matters worse, the expiry of Lilly’s second biggest selling drug, antidepressant Cymbalta (duloxetine) will also begin in major markets at the end of this year.
This double whammy has led Lilly to forecast 2012 revenues of between $21.8 to $22.8 billion, down from revenues of $23.08 billion in 2010.
Lechleiter said there were three key elements to the company’s ‘bridging’ strategy to overcome the losses and resume growth with new products.
“First and foremost, we are replenishing and advancing our pipeline. We’ve successfully rebuilt our mid- to late-stage pipeline to position Lilly for growth post-2014, with 12 assets now in Phase III, exceeding our goal of 10 by the end of 2011.
“Second, we’re investing to drive growth in the key brands that don’t lose patent protection during this period and in our countercyclical growth engines that don’t have the same cycle of patent expirations as our US and European pharma businesses. These include Japan, select emerging markets and our animal health business.
“Third, we continue to drive productivity gains across our business to fund the R&D necessary to fuel our future growth, recapitalise our physical assets and maintain our dividend at least at its current level.”
Lilly has already said that it wants to maintain its R&D budget – where other firms are making cuts – and Lechleiter is hoping this will pay off in the long term.
Lilly made a number of job cuts in 2011, including a 14% reduction in staff at its Kinsale plant in Ireland, but based on this w