R&D budget: $4.13B (€3.01B)
Change over 08: +12.6%
Income spent on R&D: 19.8%
Forget the big pharma buyout trend. Eli Lilly ($LLY) CEO John Lechleiter (photo) is determined that he can do better for investors by relying on the company's pipeline than he can buying up products and big pipelines from others in the industry.
Yes, there have been some bolt-on deals and a surge of pacts. But this year has seen a bitter harvest of bad data and troubling regulatory setbacks as Bydureon was shoved back by regulators--again. Shortly after it expanded its R&D work in Singapore, Lilly determined that the Asian facility should be shuttered. In 2009 semagacestat for Alzheimer's was one of its prize pipeline possessions. In 2010 it failed a critical Phase III trial. About the only big regulatory success it has had in five years, Effient, has been an underachiever in the marketplace. And all of Lilly's setbacks get trotted out over and over again every time there's some new mishap.
Lechleiter, though, shows no signs of buckling now. And that's not a sign of blissful ignorance. The Harvard-trained chemist, who likes to walk the mile to work, is completely at home discussing the potential of Lilly's sizeable pipeline of experimental drugs. In the meantime, Lechleiter hasn't been shy about changing the R&D model. Lilly started the trend toward big outsourcing pacts with CROs, delivering an aggressive deal with Covance that has become an industry model.
One of these days, though, he's going to have to deliver an R&D home run or face getting batted out of the big pharma park himself. The more Lechleiter looks cool, intelligent and calm in the face of major patent hits, the more analysts fret that this ship is headed for the rocks.