Big Pharma is preaching the gospel of diversification these days. Drugmakers are trying to offset future generic competition by broadening their reach, both product-wise and location-wise. But every drugmaker's approach is slightly different, and Eli Lilly CEO John Lechleiter (photo) is ready to unveil his.
In an interview with Dow Jones, Lechleiter outlines his diversification strategy, which leans heavily on animal health and emerging markets. On the animal health side, Lilly just snapped up some of Pfizer's European rights to vaccines, drugs and feed additives; Lechleiter hopes to leverage that purchase into big sales growth in Lilly's Elanco division. He wants to double animal health sales, which amounted to $1.2 billion last year.
Geographically, Lilly is particularly focused on Japan and China. Lechleiter says Lilly hopes to double its sales in emerging markets and Japan over the next five years from 2009 levels of roughly $2 billion and $1.2 billion, respectively. The company also is pushing big-time into China, staffing up at breakneck speed. Lilly added about 1,000 people to its Chinese payroll last year, he says.
Then there's M&A. Every drugmaker is doing it; the question is always, how big? Lechleiter says he remains wedded to the small deal. "We're continuing to look for opportunities that either provide us add-on products such as the animal health business or enable us to move into new areas potentially that would not normally be areas that come out of our own research," he tells the news service.
- read the Dow Jones piece