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March 21, 2012
Lilly Tries to Make It Up in China
Eli Lilly is a drug company with a lot of problems - check out this chart for their patent expiration woes, which are probably the worst in the industry. But they're trying to make it up overseas, as this news shows:
CEO John Lechleiter wants Lilly to be the fastest-growing pharma company in China. To accomplish this goal, he will concentrate on diabetes and cancer over the next 5 years as the company introduces more than a dozen drugs to the market, according to a Bloomberg report.
The drugmaker has made major strides in China and has doubled its sales force there. Its efforts seem to have paid off: Sales in China grew 25% last year--that's faster than the industry average. And with diabetes rates rising there, Lilly might have an edge with its diabetes portfolio.
A lot of companies (and not just in the drug industry) are hoping for the Chinese market to save them, and in some cases, it'll happen. But since all our assets in pharma are wasting ones (patent expirations!), it doesn't do you much long-term good if you're not discovering new drugs quickly enough. Then again, "long term" has a different definition these days - "next couple of years" is probably about as good as any CEO in the business can hope for, and perhaps the China sales can cushion the blows a bit for Lilly. But I still think that it only moves them from "in hideous trouble" to "in very bad trouble".
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