Restructuring

After promising Trump new US jobs, Eli Lilly sets out to chop 200 R&D staffers

David Ricks, Lilly

Eli Lilly is bringing out the corporate ax and aiming it at its R&D operations.

Just weeks after the company announced plans to lay off 485 staffers that had been involved in the failed solanezumab program, the company spread word on Friday that it’s looking for 200 researchers to take a “voluntary exit.”

A spokesperson for Lilly tells me that this amount to about 3% of the company’s total research staff. And the cuts aren’t being aimed at any particular unit.

“Lilly is focusing its investment in new R&D capabilities to ensure portfolio sustainability,” she added. “We plan to increase our investment and hire in strategic areas, including molecule-making capabilities, immunology and Alzheimer’s disease, across our U.S. research sites later this year.”

In response to a followup query, the spokesperson said that this is not a buyout and that it won’t target executives, then said she had no other information to offer in reply to my query whether any further layoffs are being planned.

The cuts were announced internally two days after Lilly CEO Dave Ricks assured President Trump that Lilly is in a hiring mode on the manufacturing front — a big issue for the new administration. “We’re hiring manufacturing jobs as I speak,” Ricks told Trump. “Some of the policies you’ve suggested — tax, deregulation — those are things that could really allow us to expand operations.”

But Ricks and his Big Pharma brethren have become experts at reining in employment over the last five years, rather than adding head count. And there’s nothing unusual about these kinds of R&D realignments in Big Pharma. AstraZeneca, Novartis and Merck, among others, have been doing the same thing over the past year. And Pfizer said years ago that it expects to see a constant changing lineup as it focuses on new programs and drops its duds.

Lilly announced during its Q4 call late last week that it is shuttering Expedition Pro, its sole remaining Phase III study for the one-time megablockbuster hopeful solanezumab. Solanezumab failed Expedition 3, marking a painfully expensive flop — the third straight clinical failure. Expedition Pro, said Ricks, was headed for yet another failure. The pharma giant endured a series of setbacks during a long and painful R&D drought, but it’s been rewarded by some major approvals in the last couple of years. And this year analysts have high hopes that baricitinib will follow up with an approval on its way to blockbuster status.

At the end of 2015, Eli Lilly employed 41,275 people, including approximately 23,425 employees outside the US. But it’s also been shipping jobs overseas. Five years earlier Lilly employed 40,360 people, including approximately 20,300 employees outside the United States.


The best place to read Endpoints News? In your inbox.

Full-text daily reports for those who discover, develop, and market drugs. Join 17,000+ biopharma pros who read Endpoints News by email every day.

Free Subscription

EvaluatePharma World Preview 2017