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Eli Lilly Finance

To lead financial excellence enabling life-changing medicines through strategic resource allocation and operational efficiency to transform global healthcare

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To lead financial excellence enabling life-changing medicines through strategic resource allocation and operational efficiency to transform global healthcare

Strengths

  • PORTFOLIO: Strong diabetes/obesity portfolio with Mounjaro/Zepbound (35% growth)
  • PIPELINE: Robust R&D pipeline with 18+ late-stage compounds
  • MARGINS: Industry-leading gross margins at 80%+ for key products
  • CASH: $13.2B cash reserve enabling strategic investments
  • TALENT: Experienced financial leadership team with pharma expertise

Weaknesses

  • CONCENTRATION: Revenue heavily dependent on Mounjaro/Zepbound success
  • MANUFACTURING: Supply constraints limiting full revenue potential
  • FORECASTING: Volatility in quarterly predictions affecting credibility
  • PRICING: Increasing price pressure from government legislation
  • SYSTEMS: Legacy financial systems hampering real-time decision making

Opportunities

  • EXPANSION: Geographic expansion in emerging markets (APAC, LatAm)
  • DIGITAL: Digital health integration creating new revenue streams
  • M&A: Strategic acquisitions to enhance pipeline diversity
  • ESG: Enhanced ESG initiatives improving investor relations
  • PARTNERSHIPS: Value-based payment models with major payers

Threats

  • COMPETITION: GLP-1 competitive landscape intensifying rapidly
  • REGULATION: Price regulation through IRA impacting long-term margins
  • PATENTS: Key patent expirations for established products
  • BIOSIMILARS: Growing biosimilar competition for legacy products
  • GEOPOLITICAL: Supply chain vulnerabilities from global conflicts

Key Priorities

  • INVESTMENT: Increase manufacturing capacity for GLP-1 products
  • DIVERSIFICATION: Reduce concentration risk through pipeline advancement
  • TECHNOLOGY: Modernize financial systems for real-time analytics
  • STRATEGY: Develop comprehensive pricing strategy for IRA impact
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To lead financial excellence enabling life-changing medicines through strategic resource allocation and operational efficiency to transform global healthcare

GROWTH ENGINE

Maximize value from GLP-1 portfolio expansion

  • CAPACITY: Increase manufacturing output of Mounjaro/Zepbound by 45% by end of Q2 to eliminate supply constraints
  • FORECASTING: Implement AI-driven demand forecasting reducing variance to <5% for top 5 products by Q2 end
  • ALLOCATION: Optimize capital allocation model achieving 18% ROIC on manufacturing investments by Q3
  • METRICS: Establish real-time financial dashboard for GLP-1 metrics with daily updates and executive insights
RISK SHIELD

Diversify revenue streams beyond current portfolio

  • PIPELINE: Develop financial models for all Phase 3 assets calculating NPV with 90% confidence intervals
  • PARTNERSHIPS: Evaluate and propose 3 strategic partnership/acquisition targets to diversify portfolio
  • MARKETS: Expand financial support for 5 key emerging markets increasing allocation by 30%
  • SCENARIOS: Create robust scenario planning framework modeling IRA impact with quarterly updates
DIGITAL LEAP

Transform financial systems with cutting-edge tech

  • AUTOMATION: Implement financial process automation reducing manual work by 40% in top 5 processes
  • PLATFORM: Launch consolidated financial data platform integrating 100% of critical data sources
  • ANALYTICS: Deploy AI-driven financial analysis tools for 80% of management reporting
  • TRAINING: Complete digital finance training for 95% of finance organization by end of Q2
FUTURE PROOF

Prepare finance organization for next-gen challenges

  • TALENT: Recruit and onboard 5 specialized AI/ML experts within finance organization by Q2 end
  • GOVERNANCE: Implement comprehensive AI governance framework covering 100% of finance functions
  • WORKING CAPITAL: Optimize working capital reducing cash conversion cycle by 8 days
  • COMPLIANCE: Develop IRA impact mitigation strategy preserving 90% of affected product margins
METRICS
  • OPERATING MARGIN: 38% by end of 2025 (from 33% in 2023)
  • REVENUE GROWTH: 25% YoY growth for Q2 2025
  • ROIC: 22% for overall company investments (2% increase from 2023)
VALUES
  • Integrity
  • Excellence
  • Respect for People
  • Customer Focus
  • Innovation
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Align the learnings

Eli Lilly Finance Retrospective

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To lead financial excellence enabling life-changing medicines through strategic resource allocation and operational efficiency to transform global healthcare

What Went Well

  • REVENUE: Q1 2023 revenue exceeded expectations at $8.78B, up 26% YoY
  • PRODUCTS: Mounjaro/Zepbound sales reached $1.2B, far exceeding estimates
  • MARGINS: Gross margin expanded 210 basis points to 78.7% on product mix
  • COSTS: Operating expenses remained controlled at 47% of revenue
  • GUIDANCE: FY2023 EPS guidance raised from $11.75-$12.45 to $12.20-$12.90

Not So Well

  • MANUFACTURING: Supply constraints limiting full revenue potential for GLP-1s
  • LEGACY: Revenue decline of 8% in established products portfolio
  • INVENTORY: Higher than optimal inventory levels for certain products
  • FOREX: Currency headwinds impacted international revenue by $215M
  • EXPENSES: R&D expenses increased 24%, exceeding expected growth rate

Learnings

  • CAPACITY: Manufacturing capacity planning critical for high-demand products
  • FORECASTING: Need for better demand forecasting for flagship products
  • ALLOCATION: Strategic resource allocation vital between legacy and growth
  • HEDGING: Enhanced currency hedging strategies required for global expansion
  • INVESTMENT: Balanced approach needed between short-term profit and R&D

Action Items

  • CAPACITY: Accelerate capacity expansion for GLP-1 products by Q3 2023
  • ANALYTICS: Implement advanced analytics for better demand forecasting
  • PORTFOLIO: Develop strategic roadmap for legacy product optimization
  • HEDGING: Enhance currency risk management program for key markets
  • AUTOMATION: Deploy finance automation to reduce operational expense ratio
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To lead financial excellence enabling life-changing medicines through strategic resource allocation and operational efficiency to transform global healthcare

Strengths

  • DATA: Extensive proprietary clinical and financial datasets
  • INFRASTRUCTURE: Established cloud computing infrastructure
  • ANALYTICS: Advanced analytics capabilities within Finance team
  • LEADERSHIP: Executive commitment to AI transformation
  • PARTNERSHIPS: Strategic relationships with leading AI vendors

Weaknesses

  • TALENT: Insufficient specialized AI talent in Finance organization
  • INTEGRATION: Siloed data limiting cross-functional AI applications
  • GOVERNANCE: Underdeveloped AI governance and compliance framework
  • ADOPTION: Inconsistent adoption of AI tools across finance team
  • LEGACY: Legacy systems limiting AI implementation velocity

Opportunities

  • FORECASTING: AI-enhanced revenue/expense forecasting precision
  • AUTOMATION: Financial process automation reducing operational costs
  • INSIGHTS: AI-driven competitive intelligence for strategic planning
  • OPTIMIZATION: Working capital optimization through predictive models
  • PREDICTIVE: Enhanced predictive analytics for clinical trial economics

Threats

  • SECURITY: Data security vulnerabilities with expanded AI usage
  • COMPETITION: Competitors accelerating AI finance transformation
  • REGULATION: Evolving regulatory requirements for AI in healthcare
  • QUALITY: Data quality issues compromising AI model effectiveness
  • INVESTMENT: High implementation costs diverting from core R&D

Key Priorities

  • TALENT: Build specialized AI team within finance organization
  • INTEGRATION: Implement cross-functional data integration platform
  • AUTOMATION: Prioritize high-impact financial process automation
  • GOVERNANCE: Develop comprehensive AI governance framework