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Lilly to cut jobs, close R&D sites

Some 3,500 positions will be shed amid latest research shake-up

by Lisa M. Jarvis
September 7, 2017 | A version of this story appeared in Volume 95, Issue 36

Eli Lilly & Co. is making deep cuts to its research engine as its new CEO tries to right the course of what some industry experts see as a wayward ship. The firm will shed roughly 3,500 jobs, more than 8% of its workforce, and shut down two research sites.

More than half of the job cuts will come from the U.S., many through a voluntary early retirement program, Lilly says. Research sites in Bridgewater, N.J., and Shanghai will be shuttered. An animal health drug plant in Larchwood, Iowa, will close.

Overall, the cuts will save the company about $500 million annually. Lilly says it will pocket half the savings and put the rest into new product launches and expanding the market for existing products.

The move follows a shake-up to Lilly’s oncology portfolio. In July, CEO David Ricks said 10 cancer treatments in Phase I and Phase II studies will be licensed out or partnered. Instead, the company will focus more on finding cancer treatments outside its own labs.

Among big pharma companies, Lilly has an outsize reliance on older products, according to an analysis by the market intelligence group Evaluate Pharma. And although it did manage to launch a handful of products in recent years, they haven’t been lucrative enough to offset the loss of patent protection on top-selling drugs.

Moreover, the company has been plagued by woes in its late-stage pipeline. Among the recent setbacks was a delay in the new drug application filing for baricitinib, a JAK inhibitor for rheumatoid arthritis.


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