Eli Lilly & Company Depressed Over Prozac. Patent Loss But Their $1 Billion Capital Building Program Continues

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The following is an advisory by Industrialinfo.com (Industrial Information Resources, Inc.; Houston, Texas). The end of a lucrative chapter in Eli Lilly & Company's (NYSE: LLY) (Indianapolis, Indiana) history came on August 2, 2001, when their patent expired on Prozac., the hugely popular antidepressant therapy. Prozac. enjoyed sales of about $2.5 billion in 2000, with $21 billion in sales since its launch in 1988, a third of Lilly's revenue over that period. Lilly saw their market share dwindle by over 80% as companies led by Barr Laboratories Incorporated (NYSE: BRL) (Pomona, New York), launched their own generic versions of Prozac. (fluoxetine).

Widely recognized for having an extensive product pipeline, Lilly hopes to offset the patent loss by focusing its efforts on new products, such as their drug Xigris, currently awaiting FDA approval for the treatment of sepsis, an often deadly affliction related to blood infections. Lilly has outlined a 10-year commitment to invest at least $1 billion on their Indiana operations. The capital investment program includes both new and renovated drug discovery research laboratories and manufacturing facilities.

Some of the projects underway include Building 87, a $100 million drug discovery laboratory being built at Lilly Corporate Center in Indianapolis, Indiana. Turner Construction (Dallas, Texas) is the construction manager for the project and expects completion in late 2003. A $48 million toxicology lab expansion at their Greenfield, Indiana site is expected to be complete in March of 2002. Building 132, located at Lilly Technology Center North in Indianapolis will increase manufacturing capacity of Humulin., a diabetes therapy, and should come on line in the summer of 2002 at a cost of $30 million.

Lilly has called the sales erosion from the patent loss 'their most severe ever' and none of their future drugs appear to have the immediate blockbuster potential of Prozac., notes Annette Kreuger, Chemical Industry Specialist with Industrialinfo.com. Despite these factors, Lilly's strong prospective product line and continuing investment in new research is expected to foreshadow rebounding sales and earnings growth by 2003.

Colonel Eli Lilly founded his research-based company in Indianapolis, Indiana in 1876. The company employs more than 35,000 people worldwide and markets its medicines in 159 countries.