CEO says Lilly willing to switch gears, if needed

NEW YORK (Reuters) - Although Eli Lilly & Co on Monday hitched its future mainly to drugs for cancer and diabetes, Chief Executive John Lechleiter says the company is willing to tilt heavily toward other diseases if the right acquisitions or clinical trial data come along.

"We'll obviously be very focused and aggressive on diabetes and oncology, but if a good acquisition opportunity comes along in neuroscience, we wouldn't look the other way," he said in an interview. "The same goes for cardiovascular" as well as bone and autoimmune ailments, he said in an interview.

To strengthen itself before the looming patent expirations on its schizophrenia drug Zyprexa and two other blockbuster medicines, Lilly on Monday said it will cut 13.5 percent of its workforce and trim annual costs by $1 billion. It also aims to streamline itself by January 1 into five business areas - diabetes, oncology, emerging markets, established markets and animal health.

"Lilly has over 60 molecules in some stage of clinical development and a third are cancer drugs. It's very clear that for us to be successful going forward, we have to be successful in oncology," said Lechleiter, whose widely used Gemzar drug for ovarian, lung and breast cancer faces U.S. generic competition late next year.

The company also markets Erbitux, a drug for colon cancer, through its recent acquisition of Imclone Systems Inc. It sells the medicine in partnership with Bristol-Myers Squibb.

"A unified business unit around oncology will give us the best opportunity for the right strategies in studying different types of tumors," Lechleiter said.

"It's equally clear that winning in diabetes is going to be essential for our long-term future," said Lechleiter, who cited high hopes for experimental treatments now in mid- and late-stage trials.

Lilly's current diabetes brands include Humalog and Humulin, both big-selling brands of insulin, and an injectable drug called Byetta that helps control blood sugar, with the added benefit of producing significant weight reductions in many patients.

Although Lilly's two biggest current products are Zyprexa and anti-depressant Cymbalta, the company did not designate neurosciences as one of the global business units under its planned new structure.

But Lechleiter said the company considers neuroscience a "core area" within its planned established markets unit, that could be upgraded to a business unit in its own right if ongoing studies of experimental drugs prove successful or highly important new neuroscience drugs are acquired.

"So far, we don't have any immediate plans to form a neuroscience unit, but that will be driven by events," he said.

"We have two products in Phase III trials right now for Alzheimer's disease, molecules in Phase II for treatment of depression and a molecule that could represent a new mechanism for the treatment of schizophrenia. We're very dependent on the outcome of these ongoing trials."

Although cancer and diabetes drugs are now deemed paramount, Lechleiter said history has shown the value of being willing to switch gears.

"We were a big antibiotics company until the early 1990s, and it was (anti-depressant) Prozac that brought us into neuroscience. So instead of going by therapeutic categories, you have to follow where things take you and continue to be as opportunistic as you need to be."

(Reporting by Ransdell Pierson; editing by Carol Bishopric)