You can't cut your way to success, Lilly CEO declares

It is a precept of good business that you can't cut your way to success. Although a lot of companies haven't followed this advice, John Lechleiter (photo), CEO of Eli Lilly ($LLY), seems to be taking it to heart (and repeating it often).

In an interview with Bloomberg, Lechleiter says the company must find new treatments and sell more drugs to overcome the revenue decline it will face from losing patent protection on its two top sellers, the antipsychotic Zyprexa and depression treatment Cymbalta. Zyprexa lost its protection last year, and Cymbalta falls off next year.

"I don't think we can save our way out of the enormous challenge we face," is Lechleiter's honest assessment.

Its best hope is solanezumab, a treatment for Alzheimer's disease in testing, for which Sanford C. Bernstein & Co. analyst Tim Anderson has pegged revenue potential at $9 billion. But Lechleiter says the company cannot look to that alone, acknowledging the risks that investment faces.

This is not the first time Lechleiter has spoken of the need for relying on the company's R&D efforts to move forward. He recently said the same thing to other media, and he has repeatedly turned back suggestions the company needs a major M&A deal to move forward. Also, it just scored a win at the FDA, which earlier this month approved the diagnostic agent Amyvid for use with PET scans to detect beta-amyloid plaque in a live patient's brain.

"The best course is to maintain our focus on advancing our pipeline," he said to Bloomberg.

- here's the Bloomberg story