Pharma companies are a popular target for politicians, activists and critics in general. But with the world in dire need of COVID-19 drugs and vaccines, the industry has a rare chance to bolster its image, Eli Lilly CEO Dave Ricks said Thursday.
Speaking on the company’s first-quarter conference call, Ricks said the biopharmaceutical industry has a “once in a generation opportunity to reset" its reputation.
As the pandemic has swept around the globe, countless companies have entered the race for COVID-19 drugs, vaccines and diagnostics. And it's not just about commercial opportunities, he told analysts.
“It's really about solving the problem,” Ricks said.
Over time, the industry can think about “curbing abusive behaviors”—such as overpatenting—that result in less competition, Ricks said. But for now, the CEO said he's focused on addressing the COVID-19 pandemic. As of Thursday, health officials have tracked more than 2.5 million COVID-19 infections and 180,000 deaths.
Like many other biopharma companies, Lilly has jumped into COVID-19 drug research and testing. The company is working on potential antibodies with AbCellera and testing its immunology med Olumiant in patients who've been hospitalized with COVID-19.
Meanwhile, to beef up diagnostic testing, the company set up a drive-through facility in Indianapolis and allowed some of its experts in the city to help with testing efforts.
Ricks' statements came as Lilly reported first-quarter sales of $5.86 billion, a 15% increase from the same period last year. The company benefited from $250 million in increased purchasing during the quarter as patients moved to secure supplies of their medicines ahead of lockdowns.
Throughout the rest of the year, as purchasing slows, the company expects that $250 million benefit to reverse itself. The company is also tracking a reduction in new prescription starts that it expects to peak in the second quarter. Many people have stopped going to doctors in recent weeks, so their doctors haven't been diagnosing diseases and prescribing new drugs.
Lilly is also following its "payer mix" for a potential shift from patients in commercial insurance to government plans, where prices are lower. As tens of millions of Americans lose their jobs and apply for Medicaid, for example, the company could net lower revenues for its products.
In issuing its guidance for the rest of the year, the company assumes healthcare activity will return to “more normal levels” in the second half, CFO Josh Smiley said on the call. The company reiterated much of its prior 2020 guidance, but slightly adjusted its expected earnings per share.
Lilly expects lower spending on travel and face-to-face interactions will be offset by higher spending on digital communications. The company is shelling out more cash on “extraordinary measures” to keep plants running, but higher yields at those plants should make up the difference, Smiley said.
Further, the company is expecting lower R&D costs from fewer trial starts and paused enrollment in ongoing studies to be offset by its COVID-19 development work.