|Send to printer »|
GEN News Highlights : Apr 12, 2013
Axe Falls on 1,000 at Lilly
Eli Lilly said late yesterday it will lay off fewer than 1,000 U.S. sales representatives between now and July 1, in anticipation of steep revenue losses expected as two top-selling drugs accounting for 20% of 2012 revenues lose patent protection over the coming year.
The pharma giant’s proverbial axe will fall on sales reps in Lilly’s U.S. bio-medicines division, who have marketed the two drugs—the antidepressant Cymbalta® (duloxetine hydrochloride), and the osteoporosis drug Evista® (raloxifene hydrochloride)—as well as treatments with neuroscience, musculoskeletal, cardiovascular, and mens’ health indications.
The layoffs mark the largest round of job cuts for Lilly since 2009, when it shed 5,500 employees following patent-cliff sales losses. Job reductions will be equally absorbed among employees nationwide, with only a minimal number of jobs being cut in Lilly’s headquarters city of Indianapolis, company spokesman J. Scott MacGregor told Indiana Public Media.
He told Indiana Business Journal the sales cuts would not affect Lilly’s cancer drug sales force, and that the company actually plans to increase its number of sales reps selling diabetes drugs—though not enough to make up for the latest round of layoffs. The Wall Street Journal reported Lilly plans to add about 300 diabetes sales reps, citing an unnamed source.
Lilly has refused to disclose the total size of its sales force, citing competitive reasons.
The company has already paid for the job cuts through part of the $74.5 million charge taken against full-year 2012 earnings—including $64.7 million taken during the fourth quarter—related to “restructuring to reduce the company’s cost structure and global workforce.”
Lilly’s layoff plans emerged as the pharma giant prepares to lose most of the nearly $5 billion it racked up last year on sales of Cymbalta due to its U.S. patent expiring in December. Three months later, in March 2014, Lilly’s U.S. patent on Evista will also expire, taking with it much of the drug’s $1.01 billion in 2012 revenue. Both expirations set the stage for expected competition from generic versions of the drugs.
Cymbalta’s leap off the patent cliff was forestalled by six months last year. FDA granted Lilly the six-month extension available through the agency’s pediatric-exclusivity program, in return for the company testing the drug on adolescents with depression.
Lilly revenues are expected to fall to about $20 billion this year from $22.6 billion in 2012—itself a decline from the all-time high in 2011 of $24.3 billion. The two-year trend is believed to reflect the patent expirations of cancer drug Gemzar in 2010 and antipsychotic drug Zyprexa a year later. Last year, Zyprexa sales tumbled 63% over 2011, from $4.622 billion to $1.701.4 billion.
Lilly most recently signaled its growing interest in diabetes drugs earlier this month, announcing April 2 its plan to spend an additional $180 million on its Indianapolis-based insulin manufacturing operations, on top of a $140 million expansion of those operations disclosed in November. Lilly said its latest expansion would entail adding a second insulin cartridge-filling line and boosting its insulin-active-ingredient manufacturing capacity without building a new manufacturing plant or adding to its costs.
The pharma giant has four diabetes treatments in its pipeline, three of them in Phase III: LY2189265 (dulaglutide), a once-weekly treatment for type 2 diabetes; and LY2963016 (new insulin glargine product) and LY2605541 (basal insulin analog), both for type 1 and 2 diabetes.
© 2016 Genetic Engineering & Biotechnology News, All Rights Reserved