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The Bioscience Ecosystem of the Future John C. Lechleiter, Ph.D. Chairman, President, and Chief Executive Officer CED Life Science Conference March 3, 2015

The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

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Page 1: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

The Bioscience Ecosystem of the Future

John C. Lechleiter, Ph.D.

Chairman, President, and Chief Executive Officer

CED Life Science Conference

March 3, 2015

Page 2: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

2

Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington,

“Diagnosing the decline in pharmaceutical R&D efficiency,” Nature Reviews Drug Discovery 11, 191-200 (March 2012)

Number of Drugs per Billion US$ R&D Spending

Page 3: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

25+ 9

Lilly

Bristol-Myers SquibbBristol-Myers

Squibb

Sanofi-Aventis

Merck

Glaxo-Smith Kline

Pfizer

Astra-Zeneca

Novartis

Roche

Bristol-Myers Squibb

135

Lilly

Bristol-Myers SquibbBristol-Myers

Squibb

Sanofi-Aventis

Merck

Glaxo-Smith Kline

Pfizer

Astra-Zeneca

Novartis

Roche

Bristol-Myers Squibb

135138

DATES DEALS WERE ANNOUNCED

Genentech (Roc he has held a ma jority stake sinc e 1990 and fully ac quired in 2009.)

The New York Times. Sources: Credit Suisse; company reports; Bloomberg 3

Page 4: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

4

Source: Moody’s Analytics, Regional Financial Review, July 2011

Tuition Vs. Other Price Indices

Page 5: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

10

15

20

25

30

35

40

45

Success R

ate

(%)

Year Source: National Institutes of Health

5

Page 6: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

401.6 397.0 388.9 375.0

355.9

332.0 313.8 309.9

296.3 280.4

266.5 247.8

232.3 211.1

190.9 180.1 173.7

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

U.S. Death Rates Due to Diseases of the Heart

6

Ag

e-a

dju

ste

d D

ea

th R

ate

s

pe

r 1

00

,000

Sources: U.S. Centers for Disease Control; PhRMA

Page 7: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

7

$1,000

$10,000

$100,000

$1,000,000

$10,000,000

$100,000,000

Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

Cost per Genome

The cost per genome has declined from $95,263,072 in Sept. 2001 to $5,096 in Oct. 2013

Source: NIH, National Human Genome Research Institute

Logarithmic Scale

Page 8: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

Project-focused companies (PFCs)

>

© 2015 Eli Lilly and Company 8

Page 9: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

New vehicles to access and advance

clinical-stage molecules

© 2015 Eli Lilly and Company 9

Model/Company Therapeutic Area Investors Origin of Asset

PFC: Tensha Oncology HealthCare Ventures Academia

PFC: Ixchelsis Men’s Health TVM Pharma

PFC: GLWL Research Diabetes TVM Lilly

PFC: Kaneq Diabetes TVM Pharma

PFC: Apofore Diabetes HealthCare Ventures Academia

PFC: FAAH Pain TVM Biotech

PFC: PRCL Autoimmune TVM Biotech

Non-PFC: Edinburgh Molecular Imaging Oncology Epidarex Academia

Non-PFC: Sirakoss Bone Epidarex Medical Device

Non-PFC: Enterprise Respiratory Epidarex Biotech

PFC: Project Focused Company

Page 10: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

10

openinnovation.lilly.com/dd

Page 11: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

Public-private partnerships in

Alzheimer’s Disease research

11

A4

Alzheimer’s Disease Neuroimaging Initiative (ADNI)

• Important role in mapping out the natural history of AD, thus facilitating

biomarker assessment

Anti-Amyloid Treatment in Asymptomatic Alzheimer’s Disease (A4)

• Prevention clinical trial treating patients with deposited amyloid in the

brain but minimal symptoms

The Dominantly Inherited Alzheimer’s Network (DIAN)

• Washington University School of Medicine conducting worldwide

clinical study of early-onset AD

AD

NI

A4

D

IAN

Page 12: The Bioscience Ecosystem of the Future · 2 Modeled after: Jack W. Scannell, Alex Blanckley, Helen Boldon & Brian Warrington, “Diagnosing the decline in pharmaceutical R&D efficiency,”

The Bioscience Ecosystem of the Future