2023 Newsmaker: Ricks leads Lilly to new heights

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David Ricks, Eli Lilly and Co. CEO (Courtesy of Eli Lilly and Co.)

David Ricks doesn’t run the biggest pharmaceutical company in the world or the oldest or one located in a glamorous U.S. coastal city.

But as CEO of Indianapolis-based Eli Lilly and Co., he had an even bigger distinction in 2023: Lilly became the most valuable publicly traded drug company in the world.

Ricks led the company to milestone after milestone, with a slew of product launches for diseases from obesity to inflammatory bowel disease. And when Lilly wasn’t scoring wins in the laboratory, it was issuing a series of head-turning announcements, including the launch last spring of its largest capital expenditure ever on a single site: $3.7 billion for a new manufacturing complex in Boone County.

In the process, investors rushed to buy Lilly stock, creating a massive run-up in value. Shares hit a record high of $630 apiece, up more than 70% for the year.

And even though Lilly is just the 12th-largest drugmaker in the world, with 2022 sales of $28.5 billion, the company is now the most valuable publicly traded pharmaceutical company in the world, eclipsing Johnson & Johnson, a company more than three times Lilly’s size in revenue, in market value last spring.

Lilly is now worth more than a half-trillion dollars, more than 10 times its value in 2010, when Lilly was considered a potential takeover target due to its sputtering pipeline and the looming patent expirations on its biggest sellers.

In short, it’s been one of those years that a corporate leader can only dream about. Lilly’s success has turned heads around the country, where industry leaders are more accustomed to seeing successful pharmaceuticals and biotech companies on the coasts or in Europe.

“The most valuable biotech or pharma company on the planet isn’t in Boston,” Ricks told IBJ. “It’s not in San Diego, and it’s not in London. It’s in Indianapolis.”

Lilly’s banner year and its spillover benefits for its hometown are the reasons IBJ has named Ricks its Newsmaker of the Year.

For people wondering whether a 147-year-old company has reached maturity and is ready to slow down, Ricks has another message: “I think we’re a growth story like we’ve never been before.”

That’s because Lilly has just launched what could be its biggest product ever: Zepbound for obesity and weight control. Some analysts are predicting the drug could become an instant blockbuster, racking up billions of dollars’ worth of sales in its first year. (The drug contains the same ingredients as its hot-selling diabetes drug, Mounjaro, which launched in 2022 and rang up nearly $3 billion in sales in the first nine months of this year.)

Ricks calls Zepbound a “seminal moment for us and for public health”—potentially a huge game-changer in a country where about 40% of adults are classified as obese.

In the meantime, Lilly has invested billions of dollars in research into Alzheimer’s disease, a stubborn condition that has confounded scientists for decades. Last spring, Lilly released the results of late-stage clinical trials of a protein that slowed progress of the disease by 35%.

Ricks sounded confident that donanemab will succeed—in the clinic and in the market—where so many others have failed. Lilly has spent three decades and more than $3 billion trying to find a way to treat Alzheimer’s disease, only to notch up one expensive failure after another, including three large-scale defeats since 2010.

But donanemab, still awaiting approval from federal regulators, could be a game-changer, Ricks said.

“It’s a big moment for Lilly and our scientists but also for the field,” Ricks said. “Because I think there had been a lot of skepticism about the way to treat that disease, but that’s more or less melted away in the face of great data from us.”

In the meantime, Lilly has continued to invest heavily in research and development and has a pipeline of late-stage experimental drugs for diseases from cancer and diabetes to sleep apnea and Crohn’s disease.

The company has almost doubled its spending on R&D in the seven years since Ricks took over as CEO, positioning it for another productive decade of medicines and product launches.

“You might think that as you grow, you might spend less on the next innovation,” Ricks said. “A lot of companies did that, and sort of harvested the bounty in the short term. But we’ve actually increased our investment in the long term. … Certainly, we’d expect to produce more innovation than ever before in the next decade.”

Ricks, 56, said he has no plans to step down as CEO and wouldn’t dream of moving Lilly’s headquarters out of Indianapolis, where more than 10,000 people work, making it one of the city’s largest employers.

“Why would we want to change that recipe?” he said. “It’s worked well for us. And I think it’s great for the community.”•

Check out more 2023 Newsmakers.

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