...Eli Lilly: Developing Cymbalta Study AMBA 650 University of Maryland University College (UMUC) Professor: Dr. Minkus-Mckenna Brian Natoli October 31, 2010 TABLE OF CONTENTS 5.0 Strategy5 6.0 Alternative Actions6 7.0 Recommendations7 8.0 Conclusion8 5.0 Strategy Based on the strengths, weaknesses, opportunities, and threats, the following strategies should be adopted by Lilly: 1. Taking advantage of its positive brand image can present advantages in obtaining opportunities that exist in their market. This will help Lilly broadening its portfolio. 2. Their long presence in the market and being one of the oldest companies in the pharmaceutical industry will be very positive for the company to obtain alliances for faster growth, better brand recognition, and to meet market’s competitive forces. 6.0 Alternative Actions: For the resolution of the lowered sales volume and the firm's shared market, there are three suggested alternative course of actions. Lilly’s first alternative includes the launching of new products with required features, such as pain relief, and one time dosage, however, capital consumption would be required for the production process, time and labor for marketing of new products would need longer lead times, and clinical trials would be required which create additional expenses for the Lilly. The next alternative for the company is to conduct preliminary market research. The customers' response for the existing drugs as well for...
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...Eli Lilly is a leading pharmaceutical company located in Indianapolis, Indiana, which specializes in treatment of several high profile diseases. Evista, a newly developed drug by Eli Lilly, is an estrogen replacement therapy medicine for prevention of osteoporosis which through testing has seemed to lower the incidence of breast cancer in women. This FDA approved drug is expected to be a potential blockbuster and generate revenue of 1 billion US dollars per year for the company. Pharmaceuticals is a highly competitive market and it is imperative for the leading companies to recuperate their development costs and generate returns for stockholders as well as fund research and development for potential new drugs at almost a constant rate. With the profitable lifetime for drugs, in United States, being significantly shortened since the 1980’s, Lilly Research Laboratories was able to develop Evista in a much shorter time period by adopting a Matrix-Based development approach and utilizing heavyweight teams. This strayed from their usual path of function-based product development strategy. With the possibility of profound profits from the commercialization of Evista, Dr. Gus Watanabe has to weigh whether the increasing internal resistance to heavyweight teams and shortage of resources is worth it. Watanabe needs to make a decision about adopting this new successful heavyweight team approach for commercialization of Evista as well as product development. Changes in the past few years...
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...Running head: ELI LILLY – DEVELOPING CYMBALTA CASE ANALYSIS 1 Week 4: Eli Libby – Developing Cymbalta Case Analysis Mary Juanita Hawkins University of Maryland University College Author Note This individual assignment was prepared for AMBA650, Section 9245, taught by Professor Philemon O. Oyewole. Introduction Eli Lilly and Company was established on May 10, 1876 in Indianapolis, IN and has been in business more than 132 years. The founder of this pharmaceutical company was Colonel Eli Lilly who was a union army member during the Civil War. This company deals with the development, discovery, sell, and manufacturer of drugs, such as Prozac and integrates supply-chain management within its departments. The first success that the company achieved was the coating of pills using gelatin. In 1923, the company marked another success by introducing Iletin that was used in improving diabetes. This project was the first largest insulin production that the company together with the University of Toronto invented. All through the 1950’s, various advancements were introduced such as the invention of the oral penicillin and the antibiotic known as Erythromycin. Prozac was produced in 1988 and latter succeeded in 1990. In 2000, the drug Zyprexa was utilized in the treatment of schizophrenia and later, the drug Gemzer was introduced for chemotherapy. Before Prozac the treatment available was Tofranil also known...
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...Assignment 2 —Eli Lilly in India: Rethinking the Joint Venture Strategy Executive summary Eli Lilly entered the Indian market in a joint venture with Ranbaxy, in order to capitalize on increasingly favourable market conditions, low costs and to gain a foothold for entering other Asian markets. This move succeeded because of a commitment to values for the two partners, cooperation and excellent management. Ranbaxy smoothed the way with existing distribution networks, government contacts and local market knowledge. Lilly provided foreign expertise, competent managers and capital. The venture earned both firms significant advances in market share and earnings, and the relationship remained positive throughout. As the Indian economy has become increasingly liberalized and open to foreign investment, there is great potential in the market. Other foreign firms are entering the market, and as a well-established powerful player in the market Lilly no longer needs to use Ranbaxy as an intermediate. Lilly seeks continued, stable growth in the region and needs to consolidate and refocus its business in niche drugs to remain competitive in a changing global business environment. Ranbaxy wants to move away from generics to become a more internationalized and R&D based company like Lilly, but needs significant cash flow in order to grow abroad. Both firms are considering options for the future. Problem statement Eli Lilly-Ranbaxy, a joint venture in India...
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...Caso Eli Lilly and Company: Estrategia tecnológica del proceso de manufactura (1991) Problema: Las grandes compañías farmacéuticas hacen inversiones enormes en Investigación. Aunque sólo 1 entre 5.000 ó 10.000 compuestos nuevos tienen proyección comercial, las leyes de patentes permiten explotar los productos en forma exclusiva por un promedio de 9 años. Para ellas es fundamental ser los primeros en salir al mercado con productos para públicos específicos, los cuales son tan rentables que permiten recuperar la inversión siempre que se logre conquistar el mercado rápidamente. Sin embargo, el sector está bajo un estricto control de los gobiernos, cuyas regulaciones pueden retrasar el lanzamiento de nuevos y reducen el tiempo en el que se pueden aprovechar las ventajas de las patentes. La mejor forma de contrarestar el efecto de estas demoras es crear eficiencia en las operaciones por medio de una transición fluida entre las etapas investigación, desarrollo y producción. Eli Lilly & Co. (Lilly) fue fundada en 1876. En los años 80, estaba orientada a la investigación para el desarrollo de nuevos productos en áreas específicas y logró el éxito con derivados de insulina, antibióticos y antidepresivos. Bajo una gerencia cuidadosa, Lilly promovía vínculos fuertes con universidades y centros de investigación. Sus esfuerzos de mercadeo dirigidos a los médicos le dieron una posición de liderazgo en el mercado. Lilly combinaba efectivamente dos de los elementos que forman parte de...
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...of the Pharmaceutical industry in the US and the current decline of the blockbuster products of Eli Lilly which were coming to an end of their life cycle, the company is in the process of developing three new products that plan to launch in 1996. A great number of factors such as decrease of the industry growth rate, steady decline of innovation, increasing competition from competitors, generic drug substitutes, government regulations and an ever increasing cost in manufacturing, R&D and quality protocols and processes have made the decision to launch new products into the market place a necessity and created a topic of debate within the management and leadership of the company. In response to these conditions, the management has established a company-wide initiative and goals to accomplish in the launching of their three new upcoming products. These goals were set up keeping in mind that the company wanted to bring new innovative products to their customers faster, cheaper and serving the needs of their customers. 1. Reduce manufacturing costs by 25%. 2. Reduce product development lead time by 50% as compared to the current lead time of 8 to 12 years. 3. Never Stock out – meet projected manufacturing demands. The dilemma facing this company and the upcoming challenge has given rise to a difficult decision by Steve Muller, Manager of Strategic Facilities and Planning at Eli Lily and Company. The decision was to decide on the type of manufacturing facility that will be...
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...that says “Eli Lilly.”. Inside, shelves overstuffed with bottles of medication and boxes of pills line the perimeter of the store. Colonel Eli Lilly is rolling pills in the back of the store, while his son takes the finished pills to dip in sugar. His wife is at the register, eagerly awaiting a customer. [thesis] Colonel Eli Lilly wasn’t expecting much when he opened his new business, as he was a man of many previous failures. He was born on July 8, 1838 on the...
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...1. Did Eli Lilly pursue the right strategy (i.e., should it have used a joint venture) to enter the Indian market? Why or why not? You should refer to Chapter 6 of the notes for guidance. With the upward trend of globalization, cross-border commercialization has become inherent in business strategies pursuing not only improved competitiveness but to avoid market share erosion. Expanding to new markets, reducing friction with socio-cultural and legal barriers, reduce capital costs, securing raw materials and implementing economies of scale are just a few motivations which to look abroad for and consider the intricacies of operating in another country. Changes in India’s economic policies from an import substitution to an export-driven one, was the legal foundation that allowed Eli Lilly to pursue its interest to market its drugs in India, where it already had relationships with local manufacturers to produce human or animal insulin for the Soviet Union market, but did not for the Indian market (Bartlett & Beamish, 2014, p. 524) The opportunity presented by Ranbaxy, the second largest pharmaceutical company in India, to supply certain active ingredients or intermediate products to formulate and complete Lilly’s, and for the Joint Venture (JV) to sell and distribute those products, was the perfect opportunity to enter a “new” market while sharing the costs and risks with a well-known and respected partner. With the then existing market conditions (Sales turnover caps, mandatory...
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...CASE 6-3 “Eli Lilly in India: Rethinking the Joint Venture Strategy” 1. I think Eli Lilly pursued the right strategy joining Ranbaxy Laboratories to enter the Indian market. While companies were using the global market to amortize the huge investments required to produce a new drug, they were hesitant to invest in countries where the intellectual property regime was weak. During the 1990s both companies had a strong reason for the joint venture. Ranbaxy wanted to make its presence globally and Lilly wanted to get their feet on Indian grounds. In 1992, Ranbaxy approached Lilly to investigate the possibility of supplying certain active ingredients or sourcing of intermediate products to Lilly in order to provide low cost sources of intermediate pharmaceutical ingredients. Based on the strategic alliance, Ranbaxy would supply certain products to the joint venture from its own portfolio that were currently being manufactured in India and then formulate and finish some of Lily’s products locally. From the beginning, both companies had a lot in common, they both believed in high ethical standards, technology and innovation, and future of patented products. They created the joint venture with $7.1 million capital and an initial subscribed equity capital of $3 million, with equal contribution from Lilly and Ranbaxy, leading to an equity ownership of 50 percent each. India, with an 800 million population had about 300 million of people that were considered to...
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...ADMN417 Assignment 2: Eli Lilly in India: Rethinking the Joint Venture Strategy Executive summary: Eli Lilly entered into a joint venture with Ranbaxy in India in 1992. A decade later both must decide whether this relationship remains mutual beneficial. Both companies have enjoyed a strong working relationship with identical value system as well as strong growth. Ranbaxy has become international and thus needs to concentrate more on generics and growth in US and UK; the joint venture with Eli Lilly no longer seems to be central to Ranbaxy’s current goals. With major changes in India’s regulation and patent protection, Eli Lilly can now enter the Indian market independently and soon would enjoy product patent protection. Dr. Lorenzo Tallarigo, president of Intercontinental Operations at Eli Lilly should end the joint venture with Ranbaxy in India. Eli Lilly will purchase all outstanding shares held by Ranbaxy at a fair market value, rebrand its name in India to simply Eli Lilly, and maintain current staff from the joint venture. The current operation from the previous joint venture should be maintained without any additional major changes since profits are already assured beyond 2005. Ranbaxy will be able to focus on the international markets with additional capital and Eli Lilly to continue growth in India. Problem statement: A decade after the formation of the joint venture, several changes have occurred in both the external environment as well as the expectation of...
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... $57.52 |EPS 2009 (E): $3.86 | |52 Week Low: $28.62 | | [pic] Executive Summary As analysts we were called upon to enact our due diligence in dealing with the proposed purchase of Eli Lilly common stock. We performed various analyses, which included strategy analysis, fundamental analysis, valuation, and risk assessment. Our absolute valuation calculation shows that Eli Lilly is slightly undervalued however; our relative valuation calculation shows that Eli Lilly is fairly valued. We decided to use the relative valuation recommendation because of the risk that is involved in the industry today. Current risk factors that are threatening Eli Lilly are the FDA approval process, patent expirations, pipeline concerns, the purchase of Imclone and how it will be integrated into the company, and finally the ongoing recession. Eli Lilly currently has drugs pending FDA approval, notably Effient, a...
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...Question1: Did Eli Lilly pursue the right strategy to enter the Indian market? In 1993 Eli Lilly, one of the leading pharmaceutical firms in the USA, started a joint venture in India with the leading Indian company Ranbaxy. The decision was dictated by the conditions of the US market and opportunities of the Indian market. Costlier manufacturing practices due to strict governmental control, soaring prices in 1990s, invasion of cheap generics to the USA market as opposed to low costs in India and new regulations that opened Indian market to foreign investments (up to 51%) created tempting conditions to enter one of the emerging huge markets of the world. Alliance with Ranbaxy was a smart strategy for Eli Lilly to establish its presence in India. Ranbaxy was the second largest manufacturing company of bulk drugs and generics with domestic market share of 15% in India with established distribution network and the second largest exporter to different countries, including Russia (which Eli Lilly was attempting to reach), with capital cost 50-75% lower than those of comparable US plant and R&D expenses of 2-5% of sales. Besides, Ranbaxy developed its own process for Eli Lilly's patented drug Cefaclor. Since Eli Lilly's product patent for Cefaclor expired in 1992 and the firm was expecting to protect its monopoly with process patents which were due to expire only in 1994, this gave great scope for a mutually advantageous agreement between the two companies. There was also possibility...
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...Eli Lilly Eli Lilly was founded in 1876 and started off as a small pharmaceutical manufacturer. The company has grown to be one of the biggest pharmaceutical manufacturers in the world. In the 1980’s their number one product was Prozac, and right behind that was insulin. Eli Lilly invested over $700 million dollars of research and development money into improving the lives and health of diabetic patients. There are two types of diabetes, Type I, and Type II. Type I or juvenile, is typically diagnosed in children or young adults. Diabetic children are not able to produce insulin on their own, therefore, they must have insulin injections daily. In 1921 there was no effective treatment for Type I diabetes and patients were only expected to live one year after diagnosis. Type II diabetes is the most common form of this disease and is general caused by obesity and can happen at any age. With Type II, the body does not use insulin properly, so it tries to compensate, but blood glucose levels become irregular. When first diagnosed with Type II, most patients take an oral dose of medication to help regulate insulin levels, as the disease progresses it usually necessitates insulin injections. In 1995 Europe and North America accounted for 80% of the world’s insulin market. The high rate of diagnosis in the United States and Europe was due to the higher than average incidence of obesity. Approximately 2% of the world’s population...
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...4: ELI LILLY 1. Por lo que podemos observar viendo los resultados obtenidos por la joint-venture, podemos afirmar que sí que se llevó a cabo una buena estrategia al realizar la joint-venture entre Lilly y Ranbaxy, ya que la cuenta de resultados tanto de la empresa conjunta como las de ambas empresas por separado obtuvieron un incremento en sus beneficios, no solo obteniendo reducciones en los costes sino también aprovechándose de las buenas referencias que podían obtener de ambas empresas para combinarlas en la joint-venture, el buen conocimiento del mercado y la reputación en la india de Ranbaxy y la asociación “inconsciente” de calidad que generaban los productos extranjeros importados. Además la buena afinidad entre ambas empresas y el que supieran mantener en mente el objetivo común de ambas que era el buen funcionamiento de la joint-venture, fue un aliciente más en esta asociación. Debemos destacar también el que Eli Lilly omitiese la entrada en el mercado indio de aquellos productos a los que les convenía más la existencia de patentes de producto en lugar de las patentes de proceso (como por el ejemplo el Prozac) y de este modo evitar que otras productoras indias aprovechasen el lanzamiento de dicho producto para variar el proceso obteniendo el mismo producto, podríamos decir que hizo una buena gestión evitando lanzarse piedras a su propio tejado. 2. ( )=retos únicos Andrew Mascarenhas: supo darse cuenta de la necesidad de incluir el nombre de “Eli Lilly” para...
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...The Problem Joint Ventures do not always work and when they do they don’t work indefinitely. What Eli Lilly and Ranbaxy are facing now is the dilemma of rather to continue with their JV, Eli Lilly Ranbaxy, or should they separate and continue each one by its own means. The situation represents both a problem and an opportunity to both companies, as there are important trade-offs to be considered before any decision is taken. The Environment In the last decade the environment for the pharmaceutical industry changed radically in India. Before the 1990’s there were no regulations for patent recognition and the government had an active role in establishing drug prices through the DPCO, which were situated amongst the lowest in the world. Profit margins were also regulated at around 6% of sales. As a result many of the multinationals started exiting the Indian market. As India enter the GATT and the WTO in 1994 patent protection would become active in India from 2004-2005. In the international arena, patent regulation was also little by little becoming stronger and many of the big players were going through M&A processes that further increased the sales concentration in few companies. These companies had a hard time competing with local laboratories that produced generic drugs with no R&D expenses and at a fraction of the price. Eli Lilly Ranbaxy portraits the example of the traditional JV in which Ranbaxy, a company from less-industrialized country, offered the knowledge and...
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