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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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March 1, 2010

Layoffs Coming at Eli Lilly?

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Posted by Derek

I hate to start the week out like this, but I have a report that Lilly is looking to cut quite a few chemistry positions (and maybe others), with word to come on Friday, March 12. Anyone else have anything on this?

Update: to clarify, these appear to be the layoffs that were announced last fall, not a new series. It's just that we finally seem to be finding out who stays and who doesn't. . .

Comments (35) + TrackBacks (0) | Category: Business and Markets


1. Esteban on March 1, 2010 8:52 AM writes...

A friend at Lilly said Discovery Chem had an all-employee meeting Friday morning that provided an outline of how the impending cuts would be done. Discovery Biology had something similar earlier in the week. I didn't get much detail beyond that however. Everyone was expecting cuts to be announced in Q1, so this wasn't a big surprise.

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2. Micro-man on March 1, 2010 8:58 AM writes...

It's the plague across the industry.

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3. You're Pfizered on March 1, 2010 9:02 AM writes...

I've heard from friends in non-Discovery positions that the layoffs have started down there, going from area to area in a rolling fashion.

These folks had to interview for their current jobs and were told if they made the cut or not. Not sure if that's the same situation for the chemists...

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4. Tok on March 1, 2010 9:10 AM writes...

Is this different than the cuts they announced last October?

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5. You're Pfizered on March 1, 2010 9:17 AM writes...

4-These are the cuts they announced. They are finally putting that plan to work.

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6. RandDChemist on March 1, 2010 9:20 AM writes...

Sadly, these stories seem to keep coming.

It might be very slightly tolerable if the layoffs removed the dead wood. At all levels and in all areas! Some are, from what I've read.

There is some evidence that layoffs do more harm than good:

See, that's the thing, what is the evidence to support your actions, planned or otherwise?

Layoffs should be a measure of last resort, the evidence would suggest. That means doing everything possible to avoid them. It seems like it is sometimes one of the first

Fortune recently had it's best companies to work for issue. One of the common threads was the best are those that realize their employees are their most valuable asset. They have the knowledge to get things done, and it is usually not something that can be taught in a school.

It takes all kinds. Just as their are myopic MBA's, their are myopic Ph.D. chemists. For a variety of reasons and factors, some managers have a tendency to oversimplify. Complexity and nuance are things that are ignored.

To those who say simply "adapt", the good employees are already doing that. Don't assume otherwise.

Despite the hubris overhead at a symposium over 15 years ago, the carbon-carbon bond is not a solved problem!

Finding a drug candidate is not a numbers game. Not in the least. If it were, combi-chem would have saved us years ago.

Spare me the bile about shareholder value, it's a myth anymore. It's all about corporate executive value and protecting their assets and interests. The shareholders, unless they are a big institutional investor, have little to no power.

Developing a new drug is tough, on all levels. From finding one all the way through having it on the market. Even when it's being sold, things can still and do go wrong. It takes considerable thought, diligence, and perseverance.

To me, the higher you are in a company, the more accountable you should be. Who decided to over-market? The chemist or biologist at the bench? The sales people in the field? No. It was the high-level execs. These are the ones who protect one another and then cut jobs not their own.

The pharma industry is not well-served by by the short-term vision of Wall Street. There's something to be said for privately held companies, not just within pharma.

Until employees are given a reason to be devoted and loyal, those companies that treat them as a commodity will struggle.

One of the biggest issues confronting many industries is how to foster innovation. I'll give them a hint: layoffs and fear are not the way.

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7. anchor on March 1, 2010 9:43 AM writes...

This message directed at Milkshake: Other day you posted a nice story about the possibility of jobs at various places. What kind of advice would you give to a person who luckily (still on the job) or unluckily (long line in front of you, if let go) to ease him up. Under the current climate it seems to me, you are better off losing one so that you can be on a job line quickly enough before they all disappear. I am telling you it is very gut wrenching to watch the ugly scenario unfold right in front of you and in a slow motion. You are damned if you had a job and damned if you did not! No am not Lilly employee but it hardly matters.

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8. fred on March 1, 2010 9:49 AM writes...

"It might be very slightly tolerable if the layoffs removed the dead wood."

Don't know the Lilly plan, but with PFE, if you are over 40, even a really high-performer, you are out.

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9. RTW on March 1, 2010 10:07 AM writes...

10 Fred - Glad someone else besides myself made this observation. Us 40+ somethings certainly seemed to be targeted more than the fresh faces. Guess more than one director thought that we where senile, and behind the times, as mine esentially came right out and said I was. After that I didn't stick around. Left willingly as I was not going to put up with this from a guy that had less experience than I but a better pedigree.

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10. PFE'd on March 1, 2010 10:31 AM writes...

fred - you should have said 'at PFE if you are over 40 or ex-Wyeth, you are out'.

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11. Indy on March 1, 2010 10:46 AM writes...

@ RandDChemist:

I could not agree with you more. You just nailed it right on.

Leadership drives the ship so they should be accountable for both the successes and failures.

However, it is interesting to see that the old saying "success has many fathers, but failures are always orphans" apply here and throughout the Pharma industry.

The old joke in grad school "chemistry doesn't pay" doesn't sound like a joke anymore.

And now that a large number of projects and positions are being outsourced offshore only opens the door for this cycle to continue.

Those who have seen a quick fix resulting in the long-term solution for a problem please raise your hand.

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12. Skeptic on March 1, 2010 1:28 PM writes...

The world is full of idiots who love to gamble...even with their livlihood. Thanks to the internet, the money masters will give you food stamps so you can exist and base credits for overhead based on their notion of competentcy. AFter that, your earnings will come from web based competitions that already taking place (look at Like gambling, most people will simply try and fail. Education will be based on exams and web based learning. Thats the way it is for actuaries.

And you think people won't sign up for this lousy arrangement? Haha..THINK AGAIN.

As for private investment, nobody is going to fund med chems.

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13. expharma on March 1, 2010 1:41 PM writes...

Prasugrel is a bust. Lots of patent expirations in the next couple of years. Dry pipeline. Zyprexa loss cuts huge segment of revenue. Cut the 40+ scientists!!! It's their fault!!

No wonder the leaders of discovery are leaving (retiring with lots of coin and bennies) after being touted as the great leaders in science! Accountability? HA! Lots of bad decisions going way back.

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14. Skeptic on March 1, 2010 1:50 PM writes...

The idiots who shell out big bucks to go to the stadiums to watch their world-class only athletes have now embraced their own culling mechanism. Lost in the mist of TV-Land is the harsh reality that practically all of the participants who invested oodles of their own time and money to become pro athletes failed miserably. And yet the general public embraces it wholeheartedly.

Why should it be any different for med chems?

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15. Fred on March 1, 2010 2:14 PM writes...

"practically all of the participants who invested oodles of their own time and money to become pro athletes failed miserably...Why should it be any different for med chems?"

If med chem were survival of the fittest (in med chem. Or even physical training!); I would be delighted. Right now, it's all about 1) being less than 40 2) being in the right place at the right time.

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16. Bob on March 1, 2010 2:48 PM writes...

Spot on Fred. Musical chairs comes to mind. No consideration of quality at all. Basically this, to me, reinforces the perception that the bean counters don't care about distinguishing between good and bad chemists because as far as they're concerned if you ain't Chinese you're too expensive and the quicker they can get rid of you the more beans they can save. More beans = more shareholder value (for now - no need to worry about the future or drugs or anything as they'll be happily retired or counting beans somewhere else). My advice to all new grads is become a bean counter or marry one.

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17. SteveM on March 1, 2010 2:59 PM writes...

Let me toss in the H-1B grenade...

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18. Hap on March 1, 2010 3:42 PM writes...

1) Markets are useful tools to make people's lives better, but they have limitations (externalities, for example, which econ doesn't count well) - they aren't laws of the universe, to be obeyed no matter what. They ultimately exist to make people's lives' better, and if they cease to do so, well, then they can be modified or rendered. I don't know that outsourcing is a market failure - whether it's in our worst interests or not as a nation - but governments do regulate markets (to prevent collusion, monopolies, or insider trading, for example) and so the implication that markets are sovereign entities isn't correct.

2) People bought Japanese and Korean cars (outsourcing US workers effectively), but they bought them because they were either cheaper and/or better than what US carmakers made. In the case of pharma outsourcing, there haven't been any drugs produced by the people to whom companies are outsourcing. Outsourcing can't be driven by the market (Chinese and Indian chemists able to make drugs more effectively and/or cheaper) because they haven't made any drugs yet - thus the productivity and effectiveness of the people receiving work is completely unknown. In that case, outsourcing seems like a blind risk with the only beneficiaries being short-term stockholders.

How do you retrain for jobs where potential employers don't care about quality but only about cheap? (Even Wal-Mart and budget retailers have to care about quality at some point - getting useless and cheap will come back to them with ill on large scale.) What do the companies expect to come from their work with that ethic? Or does everyone in the executive suite just believe in 2012 and figure that we're all dead anyway, so giving our workers cancer of the soul and running like hell with bags of cash is an appropriate strategy?

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19. Fred on March 1, 2010 6:16 PM writes...

"People bought Japanese and Korean cars (outsourcing US workers effectively), but they bought them because they were either cheaper and/or better than what US carmakers made."

My Toyota was made in California. I'd RATHER pay Californians and enrich a few execs in Japan than buy a POS from Detroit and reward them for making it.

Basically, Pharma is NOT interested in small molecules at ALL any more. You can do biologics, with infinite exclusivity (no bioequivalence). And new drugs = risk. When the FDA and ambulance-chasing lawyers chase drugs that are safer than aspirin (e.g. Vioxx),where's the incentive to take risk? The FDA basically KILLED the metabolism TA when they sniffed around Avandia a few years back. So, it doesn't matter if the Indians and Chinese are a bunch of hacks-- they are going to be looking at patent medicines for their own FDA-safe countries.

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20. Skeptic on March 1, 2010 6:34 PM writes...

"If med chem were survival of the fittest (in med chem. Or even physical training!); I would be delighted"

And thats why you're doomed. The elite athlete's distinguishable traits are non-transportable while the scientist leaves behind his in the form of published works that immediately allows management to kick him to the curb. Forget about all that IP crap...lawyerism has done nothing for the american worker, skilled or unskilled.

The neo-liberalism cult is flaunting right in your face that YOU HAVE NO RIGHT TO A JOB NO MATTER WHAT YOUR SKILLS, EDUCATION, ETC.

Their concept of 'fitness' is "what ever we feel like", and "bait and switch" (eg. I'm 40+ and out of a job) is part of their vocabulary.

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21. Skeptic on March 1, 2010 6:50 PM writes...

"My Toyota was made in California. I'd RATHER pay Californians and enrich a few execs in Japan than buy a POS from Detroit and reward them for making it."

Those "Californians" who assembled your Toyota could in fact be all Japanese imported workers. Whether its outsourcing or imported workers, it makes little difference. Where the money flows does.

As far as your Detroit POS, how do you think quality is determined by the average consumer? By so-called independent agencies who employ statistical models. How is that any different than the FDA? And we all know what they say about statistics.

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22. Anonymous on March 1, 2010 7:12 PM writes...

Pharma R&D in US is fading away.

Keep repeating that until it sinks in.

It is simply too expensive and unproductive.

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23. sharkface on March 1, 2010 8:12 PM writes...

"practically all of the participants who invested oodles of their own time and money to become pro athletes failed miserably...Why should it be any different for med chems?"

There is a difference. Pro athletes make millions of dollars and have beautiful woman chasing them. Succesful medchemists get shown the door, remember the Parke-Davis / Warner-Lambert Med Chem team that discovered Lipitor, and who all got let go?

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24. Hap on March 1, 2010 8:21 PM writes...

Is expensive and not productive enough better or worse than cheap and not productive at all? If China and India turn out to be cheap and productive, well, than outsourcing makes sense. In other businesses, though, offshoring has been driven by the ability of other people to do your work cheaper (and sometimes better), but none of that's clear here. You don't have any idea whether people in other places can produce drugs at a higher or lower rate than here, hence no idea what the relative productivities are. Without that data, outsourcing is either 1) a wild-assed guess by people desperate to save their businesses or 2) a decision that it's time to liquidate and get out before their stockholders realize what their company is worth?

The situation improves not when the same people are running the researchers elsewhere who are running those here. Why would you think whacking the lieutenants when the generals are still running the war is a strategy for success?

By the way, my vote is #2.

If I keep repeating your phrases, will I reach pharma management nirvana?

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25. Skeptic on March 2, 2010 6:36 AM writes...

"It is simply too expensive and unproductive."

You're right. More and more of the American idiots are taking pharmaceuticals and over the counter/internet sourced supplements at the same time. 60% of them believe the supplements are safe because they are 'natural' and cause no side-effects. Heck, what could be more productive than combining pharmaceuticals with those "safe" but largely ineffective herbal remedies. Thats a dream scenario for manufacturers and retailers. And the chinese, what a rich heritage in herbal remedies. And people are convinced the asians are rock solid in quality...just look at their car industries!

Just watch an episode of Dr. Oz and you can see the future. "Expert says buy this [click click on internet...done]"...

And even another bonanza...the products are contaminated with heavy metals...the enemy keels over from lead poisoning without ever firing a bullet.

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26. dave brennan on March 2, 2010 9:32 AM writes...

Charnwood gone
Avlon R&D gone
Lund gone
Arrow Gone
KUDOS gone
Wilmington R&D gone

Looking at the plans and fuckwits left, if you have any AZ stock, sell now -it will be arsewipe a in few years

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27. MedChem on March 2, 2010 11:06 AM writes...

Based on my own experience, I'm beginning to form some opinions on the reasons for our low productivity.

1)The industry tries too hard to turn something as intangible as innovation into a rigid flow chart process where one box is supposed to lead to another (on a timeline no less) which eventually leads to a product. Scientists are not encouraged think outside the box. Could this be why Genentech was so successful?

2) Non-experts dictate too much what we scientists do by implementing various "visions" and "paradigms" and forcing the scientists to conform to these paradigms. These people could be academician but more often than not senior scientific managements who by this time in their career are so far removed from the trenches of innovation and worry more whether they can look good at the end of the day than the project actually succeeding.

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28. Indy on March 3, 2010 4:48 PM writes...

Well, word says that not only the ax is coming down this Friday, but also that 25% of the chemists will be let go.


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29. Curiuos on March 6, 2010 10:17 AM writes...

Any update on this?

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30. Indiana on March 6, 2010 10:56 AM writes...

From cafepharma:
Indy-based medchem

Associates - 24% "reallocated"
Low level PhD - 0%
Higher level PhD - 30%
Even higher level PhD - 0%

Friday 12 will be execution day.

Rest of the sites, no predetermined reduction plan. Workforce cut will be achieved through atrition. Don't know exactly the numbers.

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31. finding Z zero on March 11, 2010 6:16 PM writes...

I think 'Indiana' has it close. This Fri will be a blood bath! The names will be revealed. There is no dead wood left. Out of 47 mid level PhD's about 14 wiil be terminated. Who goes and why will be a tough call and maybe 2 out these are an easy pick. The rest will wonder why! The associate level chemists will be named as well. Not sure it's as high as 24% though. I thought it might be 10-15%. If you stretch the amplitude on a graph enough, smnall differences in performance can loom as large as the rockies. I might be there Fri to see the sack cloth & ashes and hear the nashing of teeth. I may wear my flak suit.

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32. Concerned Hoosier on April 24, 2010 10:24 PM writes...

Friend posted to FB the following:
"Just found out they are asking for 30% of us to volunteer to leave Lilly. After that they will cut more. Might not have a job by the end of June... We were told this morning at a 7am meeting"

This FB post went up Friday April 24th.

Blood Bath insues...

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33. FellowChemPerson on April 26, 2010 1:09 AM writes...

Hoosier #32,

Was it R&D? Or across the board?

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34. ANon on April 26, 2010 7:07 AM writes...

What is FB?

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35. J-bone on April 26, 2010 8:26 AM writes...

FB = Facebook

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