After steering Eli Lilly through a long R&D drought that leaves the pharma giant with some blockbuster drug prospects, Eli Lilly CEO John Lechleiter says it’s time to step aside.
Lechleiter said this morning that he will step down from the helm at the end of this year, making way for president David Ricks to move up to the top spot. And after a brief spell as executive chairman, he will leave the company next spring.
Earlier this week Lechleiter–who started at Lilly as a chemist decades ago–was able to promise investors that the company is able to commit to steady, though not spectacular, growth. That followed a years-long decline, as generic competition cut up its old franchises and sliced away billions in revenue.
Lechleiter stood out among the other big biopharma CEOs, though. He vowed early on to keep backing his R&D team, committing more than 20% of revenue each year for drug development efforts. And even after his big play on solanezumab failed a big Phase III Alzheimer’s program, he kept the faith and backed a new trial that should read out soon.
It was a slow comeback. Initially, Lilly hit with some marginal new drugs. But recently it gained a key approval for the psoriasis drug Taltz (ixekizumab). There are other drugs–such as its CDK 4/6 cancer therapy abemaciclib or its rheumatoid arthritis drug baricitinib–now in late-stage development that could well have blockbuster futures. Only rarely has Lilly plucked new drugs up at the deals table.
In that respect, Lechleiter can go out feeling vindicated about a hang-tough strategy that came under heavy fire from some analysts and investors.
Lechleiter is being replaced by another exec who also started in the rank and file. Unlike the current CEO, Ricks came up through marketing, starting as a sales rep 26 years ago and rising to president of Lilly Bio-Medicines.
The move at Lilly now leaves three big changeups looming at the top of Big Biopharma. Both GlaxoSmithKline and Biogen are looking for new chiefs, as their current CEOs step aside after a turbulent stint at the top.
Now it’s up to Ricks to maintain the momentum in R&D at Lilly. And his first statement indicates that he’s sticking with Lechleiter’s approach, in keeping with its conservative outlook and an underlying resistance to radical change.
“Lilly has the right strategy. We’ve built a strong pipeline and have a promising portfolio of recently approved new medicines. Navigating major patent expirations in recent years, we’ve sharpened our focus and improved our vigilance and agility,” Ricks continued. “Now, we must realize our growth potential in an increasingly challenging global marketplace. We must focus on delivering better and better medicines to the patients who need them, and in so doing, benefit our employees, communities, and shareholders alike.”
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