Eli Lilly and Company

Eli Lilly and Company (NYSE: LLY) is a global pharmaceutical company and one of the world's largest corporations. Eli Lilly's global headquarters is located in Indianapolis, Indiana, in the United States. The company was founded in 1876 by a pharmaceutical chemist, Eli Lilly, after whom the company was ultimately named.

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Company profile

A Fortune 500 corporation, Eli Lilly had revenues of $14.5 billion in 2006, making it the 148th largest company in the United States and the 10th largest corporation by global pharmaceutical sales. The company is publicly traded on the New York Stock Exchange and is a member of the S&P 500 stock index. Eli Lilly is one of the Nifty Fifty stocks that propelled the late 20th century bull market.

History

Eli Lilly and Company grew from a tiny laboratory in Indianapolis in 1876 to one of the world's largest pharmaceutical companies.

Colonel Eli Lilly, a pharmacist who had served as a Union officer in the American Civil War, acquired a laboratory on Pearl Street in Indianapolis in 1876 and started Eli Lilly and Company. His innovative process of gelatin-coating pills helped establish the success of the company. When Eli Lilly died in 1898, his son Josiah K. Lilly Sr. took control of the company. Josiah inherited his father's civic mindedness and ordered the company to send much needed medicine to support recovery efforts following the 1906 San Francisco earthquake.

In 1919, Lilly hired biochemist George Henry Alexander Clowes as director of biochemical research. Clowes' negotiations with researchers who developed insulin at the University of Toronto helped launch the first successful large-scale production of insulin in 1923. The success of insulin enabled the company to attract well-respected scientists and, with them, make more medical advances.

Eli Lilly, the grandson of Col. Lilly, was named as the company's president in 1932. In 1934, the company made its first venture overseas when a Lilly office was opened in England. World War II brought production at Lilly to a new high with the manufacturing of Merthiolate and blood plasma. In 1943, the company began full-scale production of penicillin.

Eli Lilly International Corp. was formed in 1943 as a subsidiary to encourage business trade abroad. In 1945, the company opened a new plant on South Kentucky Avenue in Indianapolis and, by 1948, Lilly employed nearly 7,000 people. Also in 1948, Eli Lilly relinquished the presidency to his brother Josiah Lilly Jr. In 1952, the first public shares of stock were offered and, in 1953, Eugene N. Beesley was named president. He was the first non-family member to run the company.

Lilly continued to expand. In 1950, Tippecanoe Laboratories, in Lafayette, Indiana, increased antibiotic production with its patent on erythromycin. In 1954, Elanco Products Co. was formed for the production of veterinary pharmaceuticals. In 1969, the company opened a new plant in Clinton, Indiana. In 1968, Lilly Research Centre Ltd. near London, England was built. It was the company's first research facility outside the United States.

Lilly made an uncharacteristic, but ultimately profitable, move in 1971 when it bought cosmetic manufacturer Elizabeth Arden for $38 million. Sixteen years later, Lilly sold Arden to Fabergé in 1987 for $657 million.

Richard Wood was named CEO of Lilly in 1973. During the 1970s and 1980s, Eli Lilly and Company saw a flurry of drug production: antibiotic Keflex in 1971; heart drug Dobutrex in 1977; Ceclor, which would become the world's top selling oral antibiotic, in 1979; leukemia drug Eldisine; antiarthritic Oraflex; and analgesic Darvon.

Lilly ventured into medical instruments through the acquisition of IVAC Corp., which manufactures vital signs and intravenous fluid infusion monitoring systems. Lilly also purchased Cardiac Pacemaker, a manufacturer of heart pacemakers.

In 1989, a joint agri-chemical venture between Elanco Products Co. and Dow Chemical created DowElanco. In 1997, Lilly sold its 40 percent share in the company to Dow Chemical for $1.6 billion. In 1991, Vaughn Bryson was named CEO. During his 18-month tenure, the company reported its first quarterly loss ever. Randall L. Tobias, former vice-chairman of AT&T, was named Bryson's replacement in 1993. He was the first official recruited outside of the company. Sidney Taurel, former chief operating officer of Lilly was named CEO in 1998, replacing Tobias. Taurel was named chairman in January 1999.

Eli Lilly announced a major expansion plan in July 1999, totaling $1 billion and expected to create 7,500 jobs over 10 years, but Lilly lost exclusive rights to Prozac in 2001 and profits fell drastically. The company has since made a comeback with sales on Zyprexa and Cymbalta.

In 1998, Eli Lilly formed a joint venture with ICOS Corporation, a Bothell, Washington based biotechnology company, to develop and commercialize Cialis for the treatment of erectile dysfunction. In October 2006, Eli Lilly announced its intention to acquire ICOS, for $2.1 billion, or $32 a share. The initial attempt to acquire ICOS failed under pressure from large institutional shareholders, causing Lilly to offer $34 per share. ISS, a proxy advisory firm, advised ICOS shareholders to reject the proposal as undervalued. However, the acquisition was approved by ICOS shareholders and Eli Lilly completed its acquisition of the company on January 29, 2007. Since ICOS had no other products in development beyond Cialis, Eli Lilly promptly closed ICOS operations and terminated nearly 500 ICOS employees, except for 127 employees working at the biologics facility. In December 2007, CMC Biopharmaceuticals A/S (CMC), a Copenhagen, Denmark-based provider of contract biomanufacturing services, bought the Bothell-based biologics facility from Eli Lilly and retained the existing 127 employees.

Pharmaceutical brands

Among the company's major pharmaceutical breakthroughs are cephalosporin, erythromycin, insulin, and, with Prozac (fluoxetine), the world's first selective serotonin reuptake inhibitor for the treatment of clinical depression.

Prozac

Prozac has been a breakthrough therapy, and was one of the first such therapies in its class to treat clinical depression by blocking the uptake of serotonin within the human brain.

Prozac has given rise to a number of comparably-functioning therapies for the treatment of clinical depression and other central nervous system disorders such as obsessive compulsive disorder, bulimia nervosa, and panic disorders. Prozac works by inhibiting the reuptake of serotonin in the human brain. Prozac is prescribed to more than fifty-four million people worldwide.

Cymbalta

Another Lilly manufactured anti-depressant, Cymbalta, a serotonin-norepinephrine reuptake inhibitor used predominantly in the treatment of major depressive disorders and anxiety, ranks with Prozac as one of the most financially successful pharmaceuticals in industry history.

Cialis

In 2003, Eli Lilly introduced Cialis (tadalafil), a competitor to Pfizer's blockbuster Viagra for erectile dysfunction. Cialis maintains an active period of 36 hours, causing it sometimes to be dubbed the "weekend pill". Cialis was developed in a partnership with biotechnology company ICOS. On December 18, 2006 Lilly bought ICOS in order to gain full control of the product.

With its television advertisement for Cialis during the 2004 Super Bowl Halftime Show, Eli Lilly was one of several companies whose costly 2004 Super Bowl Halftime advertisements were largely overshadowed by the Janet Jackson and Justin Timberlake Super Bowl XXXVIII halftime show controversy.

Gemzar

In 1996, the FDA approved Gemzar for the treatment of pancreatic cancer. Gemzare is commonly used in the treatment of pancreatic cancer (usually in coordination with 5-FU chemotheraphy and radiology). Gemzar also is routinely used in the treatment of non-small cell lung cancer.

Methadone

Eli Lilly was the first distributor of methadone, an analgesic used frequently in the treatment of heroin, opium and other opioid and narcotic drug addictions.  

Thimerosal

Eli Lilly has developed the controversial vaccine preservative Thiomersal (also called Merthiolate). Thimerosal is effectual by causing susceptible bacteria to autolyze.

Secobarbital

Eli Lilly has manufactured Secobarbital, a barbiturate derivative with anaesthetic, anticonvulsant, sedative and hypnotic properties. Lilly marketed Secobarbital under the brand name Seconal.

Secobarbital is indicated for the treatment of epilepsy, temporary insomnia and as a pre-operative medication to produce anaesthesia and anxiolysis in short surgical, diagnostic, or therapeutic procedures which are minimally painful. With the onset of new therapies for the treatment of these conditions, Secobarbital has been less utilized, and Lilly ceased manufacturing it in 2001.

Secrobarbital overdoses

Secrobarbital gained considerable attention during the 1970s, when it gained popularity as a recreational drug. On September 18, 1970, rock guitarist legend Jimi Hendrix died from a Secrobarbital overdose. On June 22, 1969, Secrobarital overdose was the cause of death of actress Judy Garland. The drug was a central part of the plot of the hugely popular novel The Valley of the Dolls by Jacqueline Susann in which three highly successful Hollywood women each fall victim, in various ways, to the drug. The novel was later released as a film by the same name.

Other Eli Lilly therapies

• Alimta (for mesothelioma and non-small cell lung cancer).
• Byetta (for Type 2 diabetes).
• Cymbalta (for diabetic neuropathic pain, major depressive disorders and generalized anxiety disorder).
• Darvocet (for mild to moderate pain).
• Evista (for the prevention and treatment of osteoporosis and for the reduction in risk of invasive breast cancer).
• Forteo (for osteoporosis).
• Gemzar (a chemotherapy agent for lung, pancreatic and other cancers).
• Humalog (for diabetes).
• Humatrope (a human growth hormone for pediatric growth disorders).
• Symbyax (for bipolar disorder).
• Xigris (for severe sepsis).
• Zyprexa (for schizophrenia and bipolar disorder).

Personnel

A number of global leaders in the fields of health policy, management, and scientific research have worked at Lilly, including:

• Ernesto Bustamante, Peruvian scientist.
• Mitch Daniels, current governor of Indiana, former Hudson Institute executive, and former director of Office of Management and Budget for President George W. Bush.
• Roald Hoffmann, Nobel Prize-winning chemist.
• Michael Johns, former White House speechwriter and Heritage Foundation policy analyst.
• Claude H. Nash, CEO, ViroPharma.
• Peter Nicholas, co-founder of Boston Scientific.
• Randall L. Tobias, former United States director of Foreign Assistance and administrator of the U.S. Agency for International Development (USAID), with the rank of ambassador.

Prominent Lilly board members have included:

• George H. W. Bush, former president and vice president of the United States of America.
• Martin Feldstein, economist, Harvard University.
• Kenneth Lay, former CEO, Enron (1986-2002).
• William Verity Jr., former U.S. secretary of Commerce.

Accolades

In 2006, Fortune magazine named Eli Lilly and Company one of the top 100 companies in the United States for which to work. Also in 2006, Barron's Magazine named the company among the top 500 best managed companies in the U.S. The company was named one of the top 10 best companies for working mothers in 2004 by Working Mothers magazine.

Controversy

Main article: Eli Lilly Controversy

Eli Lilly is one of the United States' oldest and leading pharmaceutical companies, but it also has been involved in numerous controversies, including political and medical ethics controversies.

See also

• Lilly Endowment
• Lilly Research Laboratories