Eli Lilly on R&D: Two thirds internal, one third external

CFO Josh Smiley says Eli Lilly is looking to source around a third of its pipeline from outside its organization.

Speaking at the Goldman Sachs 40th Annual Global Healthcare Conference, Josh Smiley, chief financial officer at Eli Lilly, said his firm’s pipeline is comprised of around two thirds internal molecules and one third external.

“When we look historically, we’ve done a good job in late phase of partnering and bringing in assets in earlier phases of development, getting to about one third sourced externally,” he told stakeholders (transcript here). “We think that’s a good mix.”

Lilly aims for two molecules to come inhouse for each acquisition. Image: iStock/Eshma

He added Lilly does not believe a biopharma firm can be in a position where its exclusively relying on external innovation.

“That’s just hard to manage. But at the same time, we know that the best ideas are many times going to be happening outside the walls of Lilly. So that’s the mix we’re looking for.”

His comments support those made last September claiming Lilly’s goal is for its clinical portfolio at any given time to have at least a third of its assets sourced externally.

Loxo motion

The latest addition to Eli Lilly’s pipeline comes from its speedy $8 billion (€7.1 billion) acquisition of Loxo Oncology earlier this year. Lead candidate, LOXO-292, is an oral RET inhibitor being studied across multiple tumor types in Phase I/II studies.

“We saw [LOXO-292] as an opportunity of both first and best,” Smiley explained. “As we had a chance to watch some of the data mature, we got to a point where we were convinced that there was enough data that this is going to be a drug.”

He continued: “We spent a lot of time on understanding the mutation, doing modeling to understand how many patients in the US and around the world present each year with this mutation. And of course then did the work to figure out how quickly we could grow that market if we had the drug. We got to a number that we thought made sense.

“And I think what you saw from us is when we have conviction, we’re going to act fast and we were able to start the process with Loxo and concluded within a few weeks.”

Lilly’s previous M&A activity in May 2018 saw the firm add late-stage pancreatic cancer candidate pegilodecakin through the $1.6 billion acquisition of Armo BioSciences, and early-phase cancer drugs through the $110 million buy of AurKa Pharma.