Company: Eli Lilly
Based: Indianapolis, IN
Announced layoffs: 1,000
Eli Lilly's ($LLY) revenues have been plummeting for two years, off by a forecast $4 billion since 2011. Sales were shoved over the patent cliff by generic competition, first to former best-seller schizophrenia treatment Zyprexa and then for next-in-line top seller, antidepressant Cymbalta. Marched off that precipice with the revenue were about 1,000 sales reps, 40% of the drugmaker's U.S. sales force, who were let go in anticipation of Cymbalta sales carnage.
|Lilly CEO John Lechleiter|
Those who were left behind were not unscathed by the Lilly revenue nosedive. They were told their salaries would be frozen in 2014, a move expected to save about $400 million through 2016. That will hardly make up for losing patent protection on a drug that was expected to generate about $5 billion last year.
And that is the problem: There is nothing in line at this point to replace all of that lost revenue, and so this year is expected to be even bleaker than last. Lilly CEO John Lechleiter is promising that Lilly R&D will deliver multiple new drugs a year for the next several years to bring the company back. But it has promised that before, and since 2009 it has nailed only one actual new drug approval. With revenues falling even further than projected and with Lechleiter keeping to his 2014 forecast for $3 billion in profit, it is hard to imagine there won't be more job cuts this year. -- Eric Palmer (email | Twitter)
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