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Lilly to lay off hundreds after failure of Alzheimer's drug

December 2, 2016

Eli Lilly and Co. plans to lay off hundreds of U.S. sales representatives in coming months, following the failure of an experimental drug for Alzheimer's disease called solanezumab.

The Indianapolis-based drugmaker confirmed Friday the layoffs would take place in the first quarter of 2017. The company did not say how many workers would be affected, but several sources inside the company put the number in the hundreds.

"In connection to the solanezumab outcome, as well as the company’s decision to stop sales force promotion of several products in expectation of upcoming patent expirations, 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," Lilly spokesman Mark Taylor wrote in an email to IBJ.

"While we are not disclosing the number of employees impacted, I can tell you that they are all field-based roles spread across the U.S.," Taylor wrote.

Lilly said last week that its Alzheimer’s treatment solanezumab failed to slow the progression of the neurodegenerative disease, after years of testing and development. Patients treated with the drug didn’t show a meaningful slowing of cognitive decline compared to those who got a placebo.

The drugmaker also said it would take a $150 million charge to cover the costs associated with the wind-down of the experimental drug, including personnel costs.

While the layoffs were due in large part to solanezumab's failure, another factor is that Lilly plans to stop sales promotion of several products that will lose patents in coming months, including erectile dysfunction drug Cialis, ADHD drug Strattera and bloodthinner Effient.

"Impacted employees will continue in their current roles until the end of the year, after which time they will begin a 3-month reallocation period to seek other jobs at Lilly," Taylor wrote. "If an employee does not find another job by the end of March, their employment with Lilly would end and they would receive a severance."

He did not provide details on the severance package or say how many openings exist within Lilly. The company has more than 10,000 workers in Indianapolis, making it one of the city's largest employers.

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