There isn’t much about new CEO John Lechleiter to enthuse the markets about Eli Lilly at present, but this diligent scientist may well prove more than a handful for competition
When John Lechleiter joined Eli Lilly and Co. 29 years
back as a Senior Organic Chemist, little did he know that he would reach this far. Thirty seven years hence, Lechleiter has been appointed as President and Chief Executive Officer of the company, replacing Sidney Taurel, the current Chief Executive. Lechleiter will assume office from April 1, 2008. As Lechleiter recently said to Forbes, “Who would’ve thought that a kid who joined the company in 1979 as an organic chemist, wearing his whites, would be standing here today?” Taurel passed the baton to Lechleiter at a time when the company, in the last six years, has incurred losses amounting to $6.8 billion in sales to generic competition.
Chief Executives normally have a flair for financial numbers, but this guy is different, for his core competence is science. Label it as a trendsetting expedience or a step well thought of by the company, fact is that in an era where the top slot has invariably been occupied by sales & marketing executives, the appointment of a scientist can be truly considered as an epoch in the pharmaceutical industry. Undoubtedly, Lechleiter’s scientific expertise should provide Eli Lilly an edge over other drug making companies especially in the R&D. Buoyed by the announcement on December 18, the company’s stock price rose slightly to reach 53.49 cents (trading at 56.06 cents currently on January 8).
A native of Louisville, Ky., Lechleiter is a recipient of a Ph.D. in organic chemistry from Harvard. In 1986, he was made the manager of research and development projects for Europe. In 1993, he became the V.P. of pharmaceutical product development. Lechleiter was appointed senior V.P. of pharmaceutical products in 1998. He became the executive V.P. of pharmaceutical operations in early 2004. Lechleiter is a member of American Chemical Society. He is also at present serving on the Visiting Committee of Harvard Business School.
Undoubtedly, Lechleiter has climbed the top of the ladder ostensibly by his skills and knowledge. But there is no denying the fact that he lacks the global experience and multi-lingual skills of Taurel. Taurel stated on the change, “John has been preparing for his new role as my successor for several years.” An elated Lechleiter proclaimed, “We will stand firm by the timeless values laid down by our founders, yet act decisively to maintain our strong competitive position.”
Given his role and responsibility, the first thing that tops his list of agendas is to replace some of its best selling drugs, slated to lose their patents over the next few years. Eli Lilly & Co. has always been passionately focussed on R&D. With $15.6 billion sales in 2006 (less than a third of industry leader Pfizer with $48.3 billion), yet its R&D expenditure for the fiscal year 2006 was close to 20% of revenues (Pfizer spent 15.7%). And indeed, the investments may bear fruit as the drug maker is all set to introduce as many as six new drugs by 2011, at the same time when its top selling drugs, Zyprexa and Cymbalta lose their patents.
Managing short term expectations & long term growth objectives will continue to be his most compelling challenge. But with a clear road map, one could well expect Lechleiter to make it a smooth ride for Eli Lilly stakeholders, who sorely miss the good old days when Eli Lilly’s stock was trading at above 100 cents levels.
When John Lechleiter joined Eli Lilly and Co. 29 years
back as a Senior Organic Chemist, little did he know that he would reach this far. Thirty seven years hence, Lechleiter has been appointed as President and Chief Executive Officer of the company, replacing Sidney Taurel, the current Chief Executive. Lechleiter will assume office from April 1, 2008. As Lechleiter recently said to Forbes, “Who would’ve thought that a kid who joined the company in 1979 as an organic chemist, wearing his whites, would be standing here today?” Taurel passed the baton to Lechleiter at a time when the company, in the last six years, has incurred losses amounting to $6.8 billion in sales to generic competition.Chief Executives normally have a flair for financial numbers, but this guy is different, for his core competence is science. Label it as a trendsetting expedience or a step well thought of by the company, fact is that in an era where the top slot has invariably been occupied by sales & marketing executives, the appointment of a scientist can be truly considered as an epoch in the pharmaceutical industry. Undoubtedly, Lechleiter’s scientific expertise should provide Eli Lilly an edge over other drug making companies especially in the R&D. Buoyed by the announcement on December 18, the company’s stock price rose slightly to reach 53.49 cents (trading at 56.06 cents currently on January 8).
A native of Louisville, Ky., Lechleiter is a recipient of a Ph.D. in organic chemistry from Harvard. In 1986, he was made the manager of research and development projects for Europe. In 1993, he became the V.P. of pharmaceutical product development. Lechleiter was appointed senior V.P. of pharmaceutical products in 1998. He became the executive V.P. of pharmaceutical operations in early 2004. Lechleiter is a member of American Chemical Society. He is also at present serving on the Visiting Committee of Harvard Business School.
Undoubtedly, Lechleiter has climbed the top of the ladder ostensibly by his skills and knowledge. But there is no denying the fact that he lacks the global experience and multi-lingual skills of Taurel. Taurel stated on the change, “John has been preparing for his new role as my successor for several years.” An elated Lechleiter proclaimed, “We will stand firm by the timeless values laid down by our founders, yet act decisively to maintain our strong competitive position.”
Given his role and responsibility, the first thing that tops his list of agendas is to replace some of its best selling drugs, slated to lose their patents over the next few years. Eli Lilly & Co. has always been passionately focussed on R&D. With $15.6 billion sales in 2006 (less than a third of industry leader Pfizer with $48.3 billion), yet its R&D expenditure for the fiscal year 2006 was close to 20% of revenues (Pfizer spent 15.7%). And indeed, the investments may bear fruit as the drug maker is all set to introduce as many as six new drugs by 2011, at the same time when its top selling drugs, Zyprexa and Cymbalta lose their patents.
Managing short term expectations & long term growth objectives will continue to be his most compelling challenge. But with a clear road map, one could well expect Lechleiter to make it a smooth ride for Eli Lilly stakeholders, who sorely miss the good old days when Eli Lilly’s stock was trading at above 100 cents levels.
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