Eli Lilly and Co (NYSE:LLY) Discusses Job Cuts

Eli Lilly and Co (NYSE:LLY) Discusses Job Cuts

Eli Lilly and Co (NYSE:LLY) has recently confirmed that it will cut jobs following the release of disappointing results from a clinical trial evaluating solanezumab, affecting a number of sales representatives across the US.

Workforce Reduction

The company intends to minimize its extensive labor force, which has been meant to boost the commercialization of solanezumab. Without substantial data to back its New Drug Application (NDA) submission to the US Food and Drug Administration (FDA), Eli Lilly no longer needs the extra manpower.

In line with this, the pharmaceutical giant has also decided to halt the promotion of its products that are nearing their respective patent expirations. These include Cialis, Effient, and Strattera.

“We informed employees earlier this week that we would be reducing the size of our U.S. Bio-Medicines sales force in the first quarter of 2017 to better meet our future business needs,” reiterated Mark Taylor, Eli Lilly spokesperson.

The company has not specified at what rate it will cut jobs. However, speculations have it that hundreds of sales representatives will be affected.

Affected employees will retain their jobs until December 31. They will then have three months to apply for new positions within Eli Lilly. By the end of the three-month period, those who have failed to secure a job within the company will be entitled to their respective severance packages.

Solanezumab Clinical Trial Failure

Last month, the company revealed that the EXPEDITION3, a clinical trial evaluating solanezumab for the treatment of Alzheimer’s disease (AD) patients with mild dementia, had not met its primary endpoint.

Solanezumab had not demonstrated a significant slowing in cognitive decline among the subjects in accordance to the AD Assessment Scale-Cognitive subscale (ADAS-Cog14). The EXPEDITION3 had also failed to establish a new safety profile. Consequently, Eli Lilly has no choice but to put on hold its NDA submission to the US FDA.

John Lechleiter, Ph.D., Eli Lilly CEO, Chairman, and President, has guaranteed that the company will carefully reflect on how these disappointing results affect the clinical development program involving solanezumab and other AD-focused treatments in its product pipeline.

On Wednesday, Eli Lilly has closed at $67.38, down by 0.62%.