Eli Lilly and Co. is poised to meet or exceed its goals of cutting annual costs by $1 billion and eliminating 5,500 jobs, Chief Financial Officer Derica Rice said following the drugmaker’s first-quarter earnings report.

The Indianapolis company said in 2009 it would reduce its work force by nearly 14 percent, to 35,000 from 40,500, by the end of 2011. That total excludes hirings in high-growth emerging markets and Japan. The company had 38,165 employees worldwide at the end of March.

Lilly also said it would reorganize into five business units, as it looks to speed up drug development. The U.S. patent protecting the company’s top-seller, the antipsychotic Zyprexa, expires later this year, and Lilly also will lose patent protection for other key drugs in the next few years.

The drugmaker recorded a $76.3 million charge in this year’s first quarter tied to severance costs from the restructuring, as it earned $1.06 billion, or 95 cents per share, on $5.84 billion in revenue.

Chief Financial Officer Derica Rice updated analysts on the plan during a conference call, “We are very much on track to achieve that ($1 billion cost savings goal). In fact, I anticipate that we’re going to exceed that goal for the year. And in addition to that, on the head count front … we’re about 75 percent of our way to that goal, as well, so both of those we anticipate meeting by the end of the year, if not exceeding.”

Date: April 18, 2011
Source: Associated Press