Eli Lilly & Co. CEO John Lechleiter is moving on. The outspoken CEO, who’s the only scientist among Big Pharma’s chief executives, will retire as of year’s end; SVP David Ricks will take the reins.
Ricks, who has been president of Lilly Bio-Medicines since 2012, also heads up global marketing. He joined Lilly in 1996.
At Lilly’s helm since 2008, Lechleiter has presided over the Indianapolis-based company at a tumultuous time. Its biggest-selling drugs, including the antipsychotic Zyprexa and the antidepressant Cymbalta, went off patent and fell victim to generic competition, reducing the company’s sales by billions.
R&D setbacks interfered with Lilly’s ability to fill the sales gaps. But new drug approvals in recent quarters have jump-started the company’s growth engine, and Lilly now predicts 5% annual growth through 2020.
As industry leader of PhRMA at the time, Lechleiter also took on a leading role in negotiating pharma’s Obamacare deal, lamented as a drain on cash since, but accepted at the time as a better alternative to waiting for Congress to force a less favorable fee structure and Medicare reimbursement schedule. Since then, Lechleiter has been a vocal advocate for the industry, whether pushing back hard against Germany’s strict reimbursement structure or lobbying European officials against stepped-up pricing pressure.
Lechleiter has had to advocate for Lilly, too, as declining sales and drug development problems disappointed investors and raised questions for analysts. Through its “trough years,” Lechleiter continually argued that bottoming out created a new beginning for the company. Along the way, he eschewed the megamergers employed by other Big Pharmas. And he led a series of restructurings, including thousands of layoffs, while freezing salaries across the board--including his own--and cutting bonuses
Now, Lilly’s promised turnaround appears to be happening. In May, the CEO predicted 20 new launches by 2023, which would make the period “the most prolific” for new drugs since the company was founded in the 19th century, Lechleiter said. Then came Tuesday’s second-quarter earnings announcement, when Lilly laid out 5-year growth plans and touted its new drug approvals, not to mention its diabetes drug Jardiance, which last year became the first diabetes med to show cardiovascular benefits in a clinical outcomes trial.
In good news for investors, Lilly also said it would go back to increasing its dividend every year. Analysts raised their price targets after the earnings release--Bernstein hiked its estimate to $95 from $92, while Leerink Partners raised its target to $105.
- read the Lilly announcement
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