Eli Lilly & Company: Drug Development Strategy Harvard Case Solution & Analysis

Eli Lilly & Company: Drug Development Strategy Case Study Solution

Eli Lilly is a pharmaceutical company that has been founded by Colonel Eli Lilly in 1879. The company has a long successful history of 120 years. By 1994, the company had expanded to around 150 countries and revenues of $ 5.7 billion. The company had also acquired Sphinx Pharmaceuticals to increase the synthesizing capability of the company by 50 times and increase the capacity to screen compounds by eight times. The company has been lately focusing on developing the drugs for the CNS diseases, which take up around 10% of the lifetime of the US population. This case emphasizes on the opportunity of the company to launch a new drug for the migraine. This drug was based on the past research conducted by the successful drug of the company, Prozac. The company also intended to use the combinatorial chemistry in the launch of this product however, there were a number of issues that were faced by the product manager, such as time to market, optimization of the leads and whether to use combinatorial chemistry or not. Based on the detailed analysis of the case and evaluation of the options, it has been recommended that the project manager should bring the lead migraine compound in the market immediately without any further optimization. This would result in zero delay and create a first mover advantage for the company.

Background of Eli Lilly

Eli Lilly was founded in Indianapolis in 1876 in Indiana by Colonel Eli Lilly. During the 20thcentury, the company was much successful and famous for its work in the field of antibiotics. By the 1990s, the management of the company had maintained a number of research divisions across the research areas.

Lily had remained a leader in the market throughout its history of 120 years. In 1993, the company had sold the medical device and the diagnostics unit to emphasize on its core area that was vertical integration of drug discovery, production, development and distribution of the drugs to the market. The new management of the company had slashed around 10% of the workforce of the company and acquired new technologies and businesses that had strengthened the core pharmaceutical business.

The company has offices in more than 150 countries and revenues of $ 5.7 billion. The company had also acquired Sphinx Pharmaceuticals to increase the synthesizing capability of the company by 50 times and increase the capacity to screen compounds by eight times. Eli Lilly Company was spending around $ 1 billion annually for the research of diseases like clinical depression, migraine and insomnia and it has since then focused on the Serotonin drug to find a solution for Migraine.

Current Position of Eli Lilly in 2016/17

Like its historical advancements, Eli Lilly has been emphasizing on the research and production of new drugs for different diseases. The efforts of the company in advanced pharmaceutical science have brought tremendous improvement within the health care. In 2016, the company has added to its history of innovation with the new treatments for cancer and psoriasis and 7 new Lilly medicines have been launched since 2014.

The progress also continues within the research pipeline of the company. In 2017, the company has plans to continue its research and advancements for new treatments in multiple therapeutic areas such as pain, immunology, oncology, diabetes and Alzheimer’s disease(Lilly, 2017). A few of the new products that were launched by the company in the year 2016 include Crams, Taltz, Basaglar, Portrazza and Trulicity. The revenues from these new products are shown in figure 1 below:

Figure 1: New Product Revenues for Lilly

Case Facts

The case states that the pharmaceutical industry of US is one of the largest and the most profitable industries around the world with 250 USD billion revenues annually. The industry is highly a capital-intensive industry and 15% to 20% of the sales of companies are spending on the research and development of the new products.

The success ratio is too low and 3 out of 10 new drugs that are launched in the market, only become successful and it takes are 14.8 years on average to market the drugs. A number of innovations have been taking place within the US industry, which included synthetic chemistry, combinatorial chemistry and high throughput screening. Under the combinatorial chemistry, a library of related molecules had been created with the base remaining the same and various compounds could be tried at the same time clinically.

 

Eli Lilly & Company Drug Development Strategy Harvard Case Solution & Analysis

 

 

 

Along with this, the emphasis was also placed on the central nervous system diseases and the drugs to cure them. Around 10% of all the lifetime was lost due to the central nervous system diseases. The CNS market was a huge market of 11 billion US dollars and the 80% share came from the G7 nations.The Lilly scientists had hoped to capitalize on their research that they have conducted in the area of serotonin and find a drug for acute attacks on migraine.

There was currently only one drug in the market that was targeted at Migraine. However, the scientists of Lilly thought that the wrong path had been followed by the makers of Imitrex and thus they hoped to capitalize on their research to find new drug and new solutions. The product manager of the migraine drug was now facing a number of issues for racing the drug to the market or spending additional time to redefine an already promising drug candidate...................

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