Partnerships: How Can BigBrothers and Sisters Help?

LittleBrothers and Sisters Help?

Bill Desmarais, Ph.D.,Eli Lilly & Co.

May 31, 2012

Company ConfidentialCopyright© 2011 Eli Lilly and Company

May 31, 2012

Lilly at a GlanceLilly at a Glanceyy

• Founded in 1876 in Indianapolis, Indiana• $24.3B sales in 2011• 35,000 employees worldwide• Operations in 87 countries and sales in 138• Operations in 87 countries and sales in 138

countries• Award winning culture:

Fortune magazine “100 best Companies to– Fortune magazine 100 best Companies to Work for”

– Industry Week “100 Best-Managed Companies”p

– Science Magazine Best Company for Scientists

– Forbes.com “The 75 most Reputable pCompanies in the US”

Company ConfidentialCopyright© 2011 Eli Lilly and Company

2Copyright© 2009 Eli Lilly and Company

Partnering Supports GrowthPartnering Supports Growth

NecitumumabLinagliptin

Li t

Florbetapir

BI-10773

Ramucirumab

Liprotamase

ExenatideLAR

'00 ‘01 ‘02 ‘03 ‘04 ‘05 ’06 ’07 ’08 ’09 ‘10 ‘11BAFF

ArxxantTM

NERI IVGLP Fc

antibody

enzastaurin

Solanezumab

GLP Fc

Company ConfidentialCopyright© 2011 Eli Lilly and Company

3

Copyright© 2009 Eli Lilly and Company

The industry innovation engine appears to be stallingstalling…

Industry R&D spendNumber of new approved

d

The industry is investing more than three times as much as a decade a ago and producing120

130 50

Industry R&D spend

$ Billions

compounds

120 decade a ago and producing ~42% new products

Early phase research timelines have nearly doubled, while late

4850

90100110120

35

40

45111

9199

stage timelines have increased by~50%

Number of new products per $ B i f t 50 th 30

3841

4448

60708090

25

30

35

56 59

83

6573

$ Bn is a factor 50 worse than 30 years ago

56 63 7014

21 25 26 3035

30405060

15

205056

37

24 29 31 33 35 38 45 50 5614

0102030

0

5

10

Big PharmaAll others

Company ConfidentialCopyright© 2011 Eli Lilly and Company

Copyright© 2009 Eli Lilly and Company

0 0‘06‘03 ‘04‘02 ‘05 ‘07‘98‘97 ‘99 ‘00 ‘01

Patent Cliff

Company ConfidentialCopyright© 2011 Eli Lilly and Company

Upcoming Biologic Patent Expirations – the next wavewave

Company ConfidentialCopyright© 2011 Eli Lilly and Company

External Innovation External Innovation

Leverage Lilly’s . . .

Capabilities/Capacities

Molecules FinancialResourcesCapacities Resources

. . . in order to access external

Capabilities/Capacities

Molecules FinancialResourcesp

Create a bigger pie --- Mitigate risk

Company ConfidentialCopyright© 2011 Eli Lilly and Company

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Alternative Development Models

Partner 4

Partner 3

Partner 2

Partner 1

Alternative Funding Sources

General PartnerManage Fund

General PartnerManage FundSelect AssetsManage Fund

Select AssetsSelect Assets

Fund 1Fund 2, etc

$

DrugCandidate

ClinicalProof-of-Concept

$Expand molecule sources

Scale capability & capacity

Schedule

Work

Sources of Expertise

Obtain Data

Sources of Capacity

Chorus

Vanthys

ExternalSources:AcademiaBiotechPharma

Company ConfidentialCopyright© 2011 Eli Lilly and Company

8Copyright© 2009 Eli Lilly and Company