After eight years at the helm of Eli Lilly, a tenure characterized by a steadfast belief in home-grown research, rather than deals, John Lechleiter is retiring from the Indianapolis pharma giant.
Lilly (NYSE: [[ticker:LLY]]) said this morning that Lechleiter, its chairman, president, and CEO, will retire at the end of the year. He’ll remain Lilly’s non-executive chairman through the end of next May, after which time he’ll leave the board. David Ricks, who currently runs Lilly’s diversified bio-medicines unit—which develops drugs for neurological and cardiovascular disorders, among other diseases—will be named CEO on Jan. 1, and chairman at the start of next June.
“It has been a distinct honor and a privilege to serve this great company as its CEO these past eight years. I wish to thank all of my Lilly colleagues for their unfailing support as well as their extraordinary efforts throughout this period,” Lechleiter said in a statement. “As Lilly transitions from our recent challenging period of patent expirations to a new era of growth, it is the logical time for a transition in company leadership.”
Lechleiter has been at Lilly for more than three decades, starting out as an organic chemist in 1979. He climbed the ranks and eventually became Lilly’s CEO in 2008. Since that time, Lechleiter has tried to navigate the company through patent expirations for drugs like duloxetine (Cymbalta), olanzapine (Zyprexa), and raloxefine (Evista), primarily by focusing on research projects within the company. Unlike many of its large pharmaceutical peers, Lilly was loathe to make big acquisitions to solve its problems, preferring smaller deals, even as the company suffered several clinical setbacks in Alzheimer’s disease, cancer, and other areas. Lilly’s $6.5 billion buyout of ImClone Systems in 2008 was the largest deal it ever made.
Still, Lilly has stayed the course and rebounded; shares are worth about $82 apiece today, far more than the $45 or so they traded at in late 2008, and have been on a steady uptick since bottoming out in 2009. Just yesterday, the company posted better-than-expected results and raised its financial projections, in part due to good sales numbers for the diabetes drug dulaglutide (Trulicity), which was approved in 2014.
There are more challenges ahead for incoming CEO Ricks, however. Three drugs accounting for nearly one third of Lilly’s revenue, tadalafil (Cialis), pemetrexed (Alimta), and atomoxetine (Strattera), will soon go off patent. And a major event for the company, and the Alzheimer’s field, looms later this year, when the company reports data from a late-stage trial of solanezumab. The drug failed to improve symptomsin people with mild to moderate Alzheimer’s, but is now being tested in people with only mild disease. If all goes well—a big if, given the litany of failures in Alzheimer’s—Lilly could ask the FDA for approval of the drug in 2017.
“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 said in a statement. “Now, we must realize our growth potential in an increasingly challenging global marketplace.”
