Eli Lilly announces another round of job cuts. The drug maker is slashing its communications workforce by 35%. At the same time, the company has announced the development of a new drug to lower cholesterol, called Livalo.
With Zyprexa, Cymbalta, Humalog and Alimta, drugs that earn Eli Lilly a combined $12 billion a year, all facing patent expiration in the coming years, the company is trying to preserve a healthy bottom line.
"Next year alone, they'll be losing about 23% of their revenue. Over the next 3-4 years, their revenue will disappear," said University of Indianapolis Economics Professor Matt Will.
Lilly has done some dramatic things to minimize the impact including extreme layoffs as well as the development of new drugs and acquisitions. Monday Lilly announced that Livalo, a drug to lower cholesterol, is ready for market . It's a drug the company says will be cheaper and better than other similar drugs because it can be taken with other medications.
"There's lots of side effects to existing medication and Lilly thinks they have a better mousetrap," said Will.
Lilly has partnered with a Japanese company in an arena it's never been in before, and some analysts think it's too little, too late to a market owned by companies like Pfizer and Merck. But Eli Lilly does have experience entering into a area already dominated by another company. Lilly waged a successful battle with Cialis, a drug it launched in 2003.
"Viagra is a good example. They went into that market with Cialis and everyone thought the game is over, there's no way, Viagra owns this market. This last year, Viagra was 1.9 billion in revenue, Cialis was 1.6 billion in revenue," said Will.
Is Livalo the Cialas for cholesterol-lowering world? Whether it is or not, it likely won't be enough to stem the tide of job loss. Cuts are slated to continue through the end of next year. The company is due out with its next earnings report next month.
