Lilly CEO John Lechleiter to retire by year-end
- Eli Lilly CEO John Lechleiter will retire at the end of the year, stepping down after 8 years as head of the Indianapolis-based drugmaker, the company announced Wednesday.
- David Ricks, the current president of Lilly Bio-Medicines, will replace Lechleiter as of January 1, 2017.
- After several years of declining revenue, Lilly has invested heavily in building out its drug pipeline and hopes to launch 20 new drugs in the ten years between 2014 and 2023.
Lechleiter joined Eli Lilly as an organic chemist in 1979, later becoming director of pharmaceutical product development in the mid-1980s. He was appointed president and chief operating officer in 2005 and then assumed the role of CEO in 2008.
As CEO, Lechleiter ramped up R&D investment, seeking to rebuild a portfolio of drugs which had been hit by patent expiries, such as the loss of exclusivity for Cymbalta and Zyprexa. While overall revenue has fallen over the past five years, Eli Lilly sees itself poised for a future of higher growth.
Announcing quarterly earnings Tuesday, Lilly said it anticipates annual revenue growth of 5% through the end of the decade, buoyed by strong performances from several new drugs.
"Lilly is in the midst of one of the most productive periods of new product launches in our company's history, with new medicines making a substantial contribution to our revenue growth for the first half of the year," said Lechleiter in a statement on earnings Tuesday.
Continued growth from new drugs like Jardiance, Trulicity and Cyramza will be key to meeting revenue goals. Lilly's six recently launched drugs accounted for roughly two-thirds of year-over-year revenue growth in the second quarter, for example.
David Ricks, who as current head of Bio-Medicines is in charge of Lilly's largest business unit, will be responsible for continuing that growth and leading the transformation of Lilly's portfolio.
"As Lilly transitions from our recent challenging period of patent expirations to a new era of growth, it is the logical time for a transition in company leadership," Lechleiter said in announcing his retirement.
"[David Ricks] is well suited to help Lilly capitalize on the opportunities before it, as well as to confront the inevitable challenges that lie ahead."
Ricks is also a Lilly veteran, joining the company in 1996 as a business development associate. He served in several management roles at Lilly Canada and Lilly China before being named president of Lilly USA in 2009.
"Lilly has the right strategy. We've built a strong pipeline and have a promising portfolio of recently approved new medicines.," Ricks said.
That pipeline is the result of heavy investment. Lilly poured 24% of its revenues into drug R&D in 2015, the third highest mark in the industry last year, according to EP Vantage.
Lilly is focusing its investment to five core therapeutic areas: diabetes, oncology, immunology, neurodegeneration, and pain. While the near-term pipeline is headlined by the rheumatoid arthritis drug baricitinib, Lilly has high hopes for solanezumab, a drug for Alzheimer's disease, and the breast cancer drug abemaciclib. Both are currently in Phase 3 testing.
Since Lechleiter took over as CEO, Lilly stock has risen by nearly 60%, a stretch of relatively steady growth after sharp declines in the early 2000s.
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