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Home >> Business
UPDATED: 08:13, August 18, 2005
Lilly eyes R&D for sales rise
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Eli Lilly & Company, one of the world's leading pharmaceutical companies, expects to double or triple its sales revenues in China in five years by investing more in research and development (R&D).

China will be among Lilly's top 10 markets, although it now contributes only 1 per cent of global sales, Sidney Taurel, chairman, president and chief executive officer of Lilly, told China Daily.

Lilly's global revenues in 2004 stood at US$13.8 billion.

And to achieve its China goal, Lilly will boost its R&D in the country, especially on biological pharmaceuticals through co-operation with other companies. Lilly's current R&D focuses mainly on chemical pharmaceuticals, through co-operation with its Chinese partner Shanghai ChemExplorer.

Lilly has 230 scientists working in China, accounting for 20 per cent of the total number of its scientists, which is the US-based firm's largest R&D team overseas.

According to Taurel, Lilly's R&D in the country will target three most-common diseases among the Chinese: neuropathy, diabetes and cancer.

It will set up 10 training centres in China for doctors and nurses treating diabetes patients, he added.

The company launched nine new medicines in China during the past year-and-half and the number of its products in the local market has doubled during the past three years.

Lilly's continuous investment in R&D in China is also backed by the country's progressive patent protection system during the past two decades, said Taurel.

"We are very encouraged by the input of the government... in improving the system, and we are hoping to see more progress," he said.

Lilly, like many other foreign pharmaceutical firms with patented products, is facing challenges from Chinese companies making generic products due to imperfect rules concerning medicine patents in China, noted Taurel.

Usually, a generic drug company can challenge a patented medicine only when it can provide sufficient, new information about the patent, but in China, there is no such rule and thus "any patent can be challenged," he said.

"But we trust that (improvement in the situation) will happen, and we will continue with our investment in R&D."

Lilly globally spends approximately 20 per cent of its revenues on developing new drugs, higher than the industry's average of 15 per cent.

Thanks to the constant investment in pharmaceutical innovations, Lilly is "very unique in that we do not have the problem of patent expiration until 2011," and thus the company will be able to maintain a higher growth than the industrial average, said Taurel.

In comparison, nearly half of the patented medicines developed by the world's major pharmaceutical companies are facing challenges from patent expiration, mostly before 2007. Local generic pharmaceutical firms can legally produce these medicines after the patents expire.

Lilly has recently agreed to transfer its antibiotics manufacturing technology to leading Chinese company Hisun Pharmaceutical Co Ltd.

The move is part of Lilly's US$70-million global initiative to address Multi-Drug Resistant Tuberculosis in partnership with the World Health Organization.

Source: China Daily

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