Lilly Outlines Its Strategy to Become the Pharmaceutical Growth Company of the Decade

Company Details Its Late and Early-Stage Pipeline, Sales & Marketing Initiatives to Wall Street

Wednesday October 24, 8:04 am Eastern Time
Press Release
SOURCE: Eli Lilly and Company

http://biz.yahoo.com/bw/011024/242068_1.html

INDIANAPOLIS--(BW HealthWire)--Oct. 24, 2001--Eli Lilly and Company (NYSE:LLY - news) today will review with members of the investment community its strategic and operational plans for industry-leading long-term growth.

Growth Strategy

"Our growth strategy has been to either discover or collaborate with partners on drug candidates with best-in-class or first-in-class potential and make the investments necessary to maximize the value of those molecules,'' said Sidney Taurel, Lilly chairman, president and chief executive officer. "We have made tremendous progress on all fronts. Indeed, this strategy has positioned Eli Lilly and Company to become the pharmaceutical growth company of the decade.''

Taurel will emphasize the following elements of the company's compelling growth strategy:

• The company's five newer products are generating outstanding growth and have significant growth potential through new indications and formulations and expansions into new markets.

• The company's late-stage pipeline is considered by many analysts to be the best in the industry with nine potential new products expected to be launched over the next three years.

• The drug candidates in the company's early-stage pipeline are equally interesting, high-potential molecules that are expected to help fuel strong, sustainable growth during the middle of the decade and beyond.

• The company has exceptional R&D capabilities that are the most productive in the industry.

• To capitalize on current and new products, the company is aggressively building its sales and marketing capabilities and investing in a significant sales force expansion.

• The company's commitment to building top partnering skills is helping to attract many exciting molecules that are selectively strengthening the pipeline.

Product Outlook

"Excluding Prozac®, our underlying performance has been outstanding. Year-to-date, our five newer growth products -Zyprexa®, Gemzar®, Actos®, Humalog®, Evista® - grew 38 percent, and, along with several line extensions, will be an important part of future growth,'' said Gerhard N. Mayr, executive vice president, pharmaceutical operations, for Lilly. "The revitalization of our sales and marketing capabilities has led to some recent successes, such as the strong Zyprexa performance in the face of new competition in the U.S. We will further invest in sales and marketing to help realize the tremendous growth potential of the current and expected products.''

Mayr will highlight several sales and marketing initiatives the company will implement to drive current product growth and successful new product launches, including an aggressive plan of:

• Adding more than 5,000 additional sales representatives worldwide over the next three years. When combined with the 4,000 representatives added in the past two years, Lilly's global sales force will have doubled during the five-year period from early 2000 through 2004.

• Nearly doubling underlying sales and marketing spend between 1999 and 2003.

• Investing in several new indications and formulations for certain growth products, each of which is on track for launch or submission during the next several years. These include the Zyprexa IntraMuscular and long-acting depot formulations as well as the bipolar depression, psychosis and bipolar maintenance indications. New indications being pursued for Gemzar include treatment of breast and ovarian cancers and, for Evista, prevention of breast cancer and cardiovascular disease.

Late-Stage Pipeline

"We believe our late-stage pipeline is the best in the industry, with nine potential best-in-class or first-in-class therapies that address significant unmet medical needs. We continue to expect to launch five of these products between now and the end of 2002 and four more by the end of 2004. This will help fuel top-tier growth beginning in 2003,'' said John C. Lechleiter, Ph.D., executive vice president of pharmaceutical products and corporate development, for Lilly. "We continue to meet or beat almost all of our development and regulatory goals. Notably, I am pleased to announce that we recently filed our new drug application with the FDA supporting the use of atomoxetine as a treatment for attention deficit hyperactivity disorder for children, adolescents and adults.''

Lilly's late-stage pipeline is represented by the following nine products that are under review by the U.S. Food and Drug Administration (FDA) or in registration phase trials with planned submissions in the 2001 to 2003 time frame:

• Xigris(TM)- Xigris is a novel biotech product under FDA review for the treatment of severe sepsis, a systemic response to infection that leads to organ dysfunction. Annually, there are 750,000 cases in the U.S. and more than 1.5 million cases worldwide, resulting in about 1,400 deaths every day. Clinical trial data demonstrated that Xigris saved one of every five patients, or potentially thousands of lives annually, who otherwise would have died. On October 16, 2001, an FDA advisory committee was split over whether to recommend approval of Xigris for the treatment of severe sepsis. The company continues to work closely with the FDA to resolve all the questions raised by the advisory committee in order to ensure that this life-saving product is made available on an expeditious basis. The company believes strongly that its clinical data support Xigris becoming the first approved treatment for severe sepsis and is confident that it will attain product approval in the U.S. in the near term.

• Forteo(TM)- Forteo is a novel biotech product under FDA review for the treatment of osteoporosis, an often painful disease that can affect a person's quality of life and longevity. Unlike anti-resorptive agents that work to reduce bone loss, Forteo has shown in clinical trials an ability to rapidly stimulate the growth of new, quality bone and reduce the risk of spinal and non-spinal fractures. The company recently received an approvable letter from the FDA for the use of Forteo in postmenopausal women and men with osteoporosis. Approval is contingent upon labeling negotiations, agreement on measures to ensure appropriate use of the product and successful completion of manufacturing inspections. The company expects to bring this breakthrough treatment to market in 2002.

• Cialis(TM) - Cialis, a molecule being co-developed by Lilly and ICOS Corporation through the Lilly ICOS LLC joint venture, is under review by the FDA and European regulatory authorities for the treatment of erectile dysfunction. In clinical trials, Cialis has shown a consistent response in men, rapid onset and long period of responsiveness. Thus Cialis may provide patients sexual spontaneity. Trials have also shown that the absorption of Cialis is not affected by food, which, along with other findings, suggests Cialis may have a simple dosing regimen. This innovative product's expected launch is the second half of 2002.

• Atomoxetine - Lilly announced today that it has recently filed a new drug application with the FDA for the use of atomoxetine, a highly specific norepinephrine reuptake inhibitor, as a treatment for attention deficit hyperactivity disorder for children, adolescents and adults. In clinical trials, atomoxetine - a non-stimulant - has shown strong efficacy and favorable side-effect profile. The company plans to launch this novel product in the second half of 2002.

• Duloxetine for Depression - This dual reuptake inhibitor of both serotonin and norepinephrine is being studied for the treatment of depression. The company has just completed three Phase III trials that suggest that duloxetine's distinctive clinical profile may enable it to address a number of unmet medical needs in the antidepressant market. The company plans to make a duloxetine submission for the treatment of depression in 2001.

• Olanzapine and Fluoxetine Combination (OFC) - Lilly is studying its combination of olanzapine and fluoxetine for treatment-resistant depression and psychotic depression. An estimated 17 to 30 percent of people taking depression medications have failed to respond to at least two antidepressants. Early clinical data have been encouraging. If further clinical data are positive, Lilly could make a treatment-resistant depression submission as early as 2002.

• Alimta(TM) - Alimta is a multitargeted antifolate in Phase III clinical studies for the treatment of mesothelioma, a rare lung cancer usually associated with exposure to asbestos. Alimta's unique ability to block three important enzymes may disrupt a cancer cell's machinery and prevent it from replicating. This mechanism likely explains Alimta's apparent activity across a broad range of tumors. In clinical trials, the toxicity of Alimta appears to be significantly reduced with the administration of folic acid and B12. The company is also studying Alimta as a treatment for non-small-cell lung, pancreatic, metastatic breast, colorectal, and gastric cancers. The company's targeted mesothelioma submission is mid-2002.

• Duloxetine for Stress Urinary Incontinence - Duloxetine is also being studied for the treatment of stress urinary incontinence (SUI). Urinary incontinence is a disease that affects nearly 30 percent of women. SUI is a prevalent form of urinary incontinence with no approved treatments. In clinical trials, duloxetine had a positive impact on SUI. The company is targeting a duloxetine submission for the treatment of SUI in late 2002.

• PKC Beta Inhibitor - PKC is being studied for the treatment of diabetic macular edema and diabetic retinopathy, the leading cause of blindness in people under the age of 65. Of the $200 billion spent worldwide on diabetes care every year, the majority is for chronic vascular complications that occur despite the improvements in glucose control made possible by new insulins and oral medications. Currently, there are no effective pharmacological therapies that directly target the mechanism of chronic complications of diabetes. The company is encouraged by early data and hopes to make a submission in Europe in 2003.

Early-Stage Pipeline

"Following our late-stage drug candidates, we have a next generation of molecules that are just as exciting and are expected to propel outstanding growth through the rest of the decade. From 2004 through 2006, we have the potential to submit as many as 18 registration packages for new chemical entities. Today, we separately announced another addition to our early-stage pipeline - fasidotril - which is a promising compound for hypertension and congestive heart failure that we licensed from Bioprojet,'' said August M. Watanabe, M.D., Lilly executive vice president, science and technology. "We continue to build excellent R&D capabilities, including substantial biotechnology expertise and the most diverse, cutting-edge drug discovery programs, such as the recent addition of antisense technology from Isis. These capabilities have improved our discovery success rate two-fold over the past four years as now 80 percent of the molecules we select as drug candidates are successfully progressing to Phase I studies.''

Watanabe will review the following selected compounds in the company's early-stage pipeline:

• Resiquimod - Resiquimod represents a potential breakthrough treatment for herpes that is currently in Phase III clinical trials for genital herpes. It is one of a new family of immune response modifiers developed by 3M Pharmaceuticals that act in a novel way by stimulating the human body's immune system to fight viral infections. Ongoing clinical trials suggest that resiquimod significantly increases the interval between outbreaks, without the need for continuous treatment. Some investigators believe that a long-lasting immune suppressive effect may be achieved with several courses of therapy, placing the disease into clinical remission and potentially reducing viral transmission. 3M and Lilly are targeting submissions in the U.S. and Europe in 2004.

• ISIS 3521 - This antisense agent, recently licensed from Isis Pharmaceuticals Inc. is in early Phase III trials and represents a new approach to the treatment of non-small cell lung cancer. In an ongoing Phase II trial, ISIS 3521 in combination with chemotherapy is showing a median patient survival of nearly 16 months, which is about twice as long as the approximately 8 month survival achieved by patients receiving standard chemotherapy alone. Additionally, ISIS 3521 was well tolerated with minimal side effects attributable to the drug. The companies plan to submit a regulatory application no later than 2004.

• MDR - The company's potent and specific multi-drug resistance modulator is in Phase II clinical trials and has shown activity in tumors that have become resistant to certain anticancer drugs. Interim data from two Phase II efficacy studies suggest strong response rates in patients with relapsed and refactory acute myeloid leukemia (AML) and soft-tissue sarcoma. The details of the AML study will be presented at the American Society of Hematology meeting in December 2001. Phase II studies are expected to continue into 2002.

• GLP-1 - This glucagon-like peptide 1 represents a potential new way of treating type 2 diabetes, which may provide important benefits over insulin such as less resulting hypoglycemia, less frequent monitoring of blood-glucose levels, less frequent dose adjustments, less weight gain, decreased glucagon levels and, most importantly, stopping the progression of diabetes. The company is currently in Phase II studies and expects to make a decision in 2002 regarding whether to advance GLP-1's development into Phase III.

• Sivelestat - This neutrophil elastase inhibitor from Ono Pharmaceutical Co. Ltd. may offer a novel approach to treating acute lung injury and adult respiratory distress syndrome. Ono has submitted sivelestat for regulatory review in Japan. Lilly has begun a multinational Phase II study to confirm the Japanese study results.

• Fasidotril - As separately announced today, this vasopeptidase (or ACE/NEP) inhibitor from Bioprojet is one of a potential new class of compounds for the treatment of hypertension and congestive heart failure that may provide significant advancements over current therapies. Phase II studies will continue through 2002.

• CS-747 - This antiplatelet inhibitor from Sankyo Company Ltd. is in Phase I clinical trials for the secondary prevention of stroke and acute coronary syndromes (heart attack and unstable angina). This potent antiplatelet agent has the potential to offer important advantages over current therapies. The companies plan to begin Phase II studies in 2002.

• Eflucimibe - This ACAT inhibitor from bioMerieux-Pierre Fabre is in Phase I clinical trials and may offer a novel approach to treating atherosclerosis. Unlike current therapies that focus on reducing LDL cholesterol in the blood, eflucimibe may reduce both LDL levels and plaque that has built up on the vessel wall. If successful, eflucimibe could represent a major advance over current statin therapies. Phase II clinical trials are expected to begin in 2002.

Financial Expectations

The company reaffirmed its expectations of single-digit sales growth for 2001 and 2002. Also, excluding unusual items, the company continues to expect earnings per share to be $.59 to $.61 in the fourth quarter of 2001, $2.75 to $2.77 for the full year 2001, and $2.70 to $2.80 for 2002. For 2003, the company continues to target high-teen earnings-per-share growth.

In summary, Taurel noted, "Clearly, with the strength of our currently marketed growth products and the exciting compounds we have in our extensive pipeline, we are on the verge of a new era of outstanding growth for Lilly. Indeed, our promising pipeline, together with our five best-in-class growth products, have positioned Eli Lilly and Company to be the growth pharmaceutical company of the decade.''

Webcast of Investment Community Meeting

A live webcast of the Lilly Investment Community meeting, along with presentation slides, is available through a link on Lilly's website at www.lilly.com. The meeting begins today at 8:30 a.m. Eastern Daylight Savings Time and will be available for replay through November 7, 2001.

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com.

This press release contains forward-looking statements that are based on management's current expectations. However, actual results may differ materially due to various factors. In particular, the company's expectations will be affected by the continuing impact of generic fluoxetine on Prozac sales in the United States. Also, there are significant risks and uncertainties in pharmaceutical research and development. There can be no guarantees with respect to pipeline products that future clinical studies will support the data described in this release, that the products will receive regulatory approvals, or that they will prove to be commercially successful. The company's results may also be affected by such factors as competitive developments affecting its current growth products, the timing of anticipated regulatory approvals and launches of new products, other regulatory developments involving current and future products, the impact of governmental actions regarding coverage and reimbursement for pharmaceuticals, and the impact of exchange rates. For additional information about the factors that affect the company's business, please see Exhibit 99 to the company's latest Form 10-Q filed August 2001. The company undertakes no duty to update forward-looking statements.

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Actos(R)(pioglitazone hydrochloride, Takeda)
Alimta(TM)(multitargeted antifolate, Lilly)
Cialis(TM) (tadalafil), Lilly-ICOS LLC
Evista(R)(raloxifene hydrochloride, Lilly)
Forteo(TM)(teriparatide injection [rDNA origin], Lilly)
Gemzar(R)(gemcitabine hydrochloride, Lilly)
Humalog(R)(insulin lispro, Lilly)
Prozac(R)(fluoxetine hydrochloride, Dista)
Xigris(TM)(drotrecogin alfa (activated), Lilly)
Zyprexa(R)(olanzapine, Lilly)

Note to Editors: In the text above, the word "Forteo'' has an accent symbol over the "e''. Also note, the word "bioMerieux-Pierre'' has an accent symbol over thefirst "e''. These symbols have been removed for transmission purposes only.

Contact:
Lilly
Terra L. Fox, 317/276-5795

*** POSTED ON OCTOBER 25, 2001 ***