Eli Lilly

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Eli Lilly and Company:Drug Development Strategy
Assignment One
RSM494: Technological Strategy

2/16/2012
Antora Sanchari Ahmed
997292139
Professor Terry Amburgey

TABLE OF CONTENTS

Executive Summary………………………………………………………………………..3

Market Analysis……………………………………………………………………………4

Industry Analysis………………………………………………………………………….5

Product and Process Analysis…………………………………………………………….7

Company Strategy………………………………………………………………………...9

Recommendations………………………………………………………………………..11

Conclusion………………………………………………………………………………..13

EXECUTIVE SUMMARY This case outlines the difficulty faced by Eli Lilly, a pharmaceutical company’s decision as to whether they should develop a lead migraine compound. This decision is faced by the Project Manager Bianca Sharma and she has to make recommendations in the PTAC meeting. A number of things have to be considered like- time to market, diversity of leads, traditional or combinatorial chemistry etc. which is unique to the pharmaceutical industry. Other factors which might not be unique to this industry but still has to be considered in this analysis are- intellectual property (IP), funding for clinical trials, reliability of the product and process, alternatives to the product, firm’s short term and long term strategy, market conditions etc. Eli Lilly’s success depends on their ability to strategize their next move regarding the development of this lead compound and exploiting the opportunities by careful considerations and then choosing the best option among the following: Scenario 1: Take the lead compound into clinical without further research and race it to the market. Scenario 2: Take some additional time to refine the current lead (using combichem) and then release to clinicals. Scenario 3: Spend significantly more time to discover new migraine drug platforms (using combichem) that may result in other promising leads.

MARKET ANALYSIS:
The US pharmaceutical market share for CNS diseases are expected to increase significantly as shown in the figure. Eli Lilly already has a billion dollar anti-depressant drug Prozac which was hugely successful and which used targeted serotonin levels. This serotonin was associated with migraine as well; therefore, Lilly once again conducted research in this area hoping to find a drug that specifically targeted migraine. At present the only drug for migraine was Glaxo’s Imitrex, which was only mildly effective and had an adverse effect on heart’s vessels thereby limiting its use. This drug affected the serotonin 1d receptor, however, Lilly researchers found another serotonin subtype, the 1f receptor, which was involved in migraine. Using traditional methods, Lilly held a very promising lead LY329511, against which all other compounds have to be tested and they have already found a better one LY334370 using combinatorial chemistry. In the market analysis done by Anne Thieu (Exhibit 9), if Lilly’s product is more effective than the 1d compounds, they can bring the drug to the market in 2001 and it will build up to its peak in 2005 and hold a dominating market share for another 3 years till competitors erode away profits after which its patent will expire. According to her market research almost 40% of non- consulters could be motivated to seek treatment increasing the market for new serotonin based drugs by 3-4 times. Based on this, there is great potential since Glaxo’s Imitrex is enjoying considerable amount of sales growth each year (Exhibit 9), which is remarkable considering only 10% of migraineurs are treated by Imitrex due to its limitations.

INDUSTRY ANALYSIS Time to Market: The average time to market for a drug is...
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