Lilly to lay off about 500 after drug fail
INDIANAPOLIS — Lilly USA announced Thursday it will eliminate about 485 jobs nationwide in wake of the failure of a drug intended to treat Alzheimer's disease.
The company said 75 employees in Indiana, where the subsidiary of multinational drug maker Eli Lilly and Co. (LLY) has its headquarters, will be affected, according to the Indiana Department of Workforce Development. Eli Lilly's stock price closed down 69 cents Thursday to $76.84, a less than 1% drop.
All of those affected worked in the unit that had been developing solanezumab, a medication designed to slow the development of Alzheimer's, a Lilly official wrote in a letter to the state and Indianapolis Mayor Joe Hogsett. In December, Lilly announced that trials showed the drug did not achieve its goal and layoffs would be forthcoming.
Lilly said it was closing its entire Integrated Health Partners/Cardiovascular Account Specialists department, part of its Bio-Medicine Business Unit. Eli Lilly had almost 42,000 employees worldwide as of June 30, 44% work in the United States and more than a quarter work in Indianapolis, according to the company's website.
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Some who worked in that unit already have found jobs elsewhere in Lilly, but about 485 have not, wrote Raymond Muller, senior director for human resources. The employees, some of them sales representatives, work from their homes across the USA.
The layoffs, which the company said were expected to be permanent, will take effect March 31. Those affected can apply for openings within Lilly in the intervening period.
Eli Lilly and Co. will release its fourth-quarter and 2016 financial results Jan. 31. Third-quarter revenue, released in October, was up 5% from the previous year to $5.2 billion but net profit declined by 3% to $778 million.
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In recent years, Lilly revenues have been affected as patents on several of its best-selling brand-name drugs expired, allowing generic drug makers to step in with less expensive alternatives. It lost U.S. patent protection on schizophrenia medication Zyprexa in 2011 and Cybalta, a treatment for depressive disorder and diabetic nerve pain in 2013.
Its patent for erectile dysfunction drug Cialia, which was 6% of worldwide revenues in 2015, expires in November, according to the company's 2015 annual report. And a portion of its patent for lung cancer drug Alimta, also 6% of worldwide revenues, expires this month.
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