The Bottom Line:
- Eli Lily was founded in 1876 by Colonel Eli Lily, a pharmaceutical chemist and Union Army veteran.
- The company experienced significant growth before and after World War I, including the expansion of its Indianapolis facility in 1923.
- Lily began selling the world’s first commercial insulin product to treat diabetes in the 1920s.
- In 1971, Lily became a publicly traded company on the New York Stock Exchange and later acquired the cosmetic brand Elizabeth Arden in 1971.
- Despite facing a $1.4 billion fine in 2009 for illegally marketing its blockbuster drug Zyprexa, Lily’s recent success with its GLP-1 product Manjaro has propelled the company to new heights, making it the largest healthcare company in the world with a market cap of over $800 billion.
Founding and Early Expansion
The Birth of a Pharmaceutical Giant
Eli Lilly and Company was established in 1876 by Colonel Eli Lilly, a pharmaceutical chemist and Union Army veteran. The company experienced significant growth in the years leading up to and following World War I, including the expansion of its Indianapolis facility in 1923. This growth laid the foundation for Lilly’s future success and established it as a major player in the pharmaceutical industry.
Pioneering Diabetes Treatment and Going Public
In 1923, Lilly began selling Iletin, the world’s first commercial insulin product, to treat diabetes. This groundbreaking development marked the beginning of Lilly’s long-standing commitment to improving the lives of people with diabetes. In 1952, Lilly became a publicly traded company on the New York Stock Exchange, opening up new opportunities for growth and expansion.
Diversification and Challenges
In 1971, Lilly acquired cosmetic brand Elizabeth Arden for $38 million, demonstrating its willingness to diversify its portfolio. The acquisition proved to be a financial success, with Lilly eventually selling Arden to Fabergé for $657 million in 1987. However, the company faced challenges in 2009 when it was fined over $1.4 billion, the largest in US history at the time, for illegally marketing its blockbuster mood disorder drug Zyprexa.
Pioneering Insulin Treatment for Diabetes
The Discovery of Insulin and Its Impact on Diabetes Treatment
In 1923, Eli Lilly and Company made a significant breakthrough in the treatment of diabetes by introducing Iletin, the world’s first commercially available insulin product. This groundbreaking development revolutionized the management of diabetes and improved the lives of countless individuals suffering from the disease. Lilly’s pioneering work in insulin production and distribution set the stage for the company’s ongoing commitment to advancing diabetes care.
Collaborating with Leading Researchers to Refine Insulin Therapy
Lilly’s success in insulin production was the result of close collaboration with leading researchers in the field, including Dr. Frederick Banting and Charles Best, who first discovered insulin in 1921. By working together with these brilliant minds, Lilly was able to refine the production process and ensure a consistent, high-quality supply of insulin for patients. This collaborative approach to research and development became a hallmark of Lilly’s corporate culture and continues to drive its pursuit of innovative treatments.
Expanding Access to Life-Saving Medication
As Eli Lilly and Company continued to improve its insulin production capabilities, the company also focused on expanding access to this life-saving medication. By establishing a global distribution network and partnering with healthcare providers around the world, Lilly made insulin more readily available to those who needed it most. This commitment to increasing access to essential medicines remains a core value of the company to this day, as it strives to make its treatments more affordable and accessible to patients worldwide.
Becoming a Publicly Traded Company and Diversifying
Entering the Public Market and Expanding Portfolio
In 1952, Eli Lilly and Company took a significant step forward by becoming a publicly traded company on the New York Stock Exchange. This move opened up new opportunities for growth and allowed the company to access capital markets to fund its ongoing research and development efforts. In 1971, Lilly further diversified its portfolio by acquiring the cosmetic brand Elizabeth Arden for $38 million. This acquisition proved to be a savvy business decision, as Lilly eventually sold Arden to Fabergé for $657 million in 1987, realizing a substantial return on its investment.
Navigating Legal Challenges and Embracing Innovation
Despite its success, Eli Lilly and Company has faced its share of challenges over the years. In 2009, the company was fined over $1.4 billion, the largest penalty in US history at the time, for illegally marketing its blockbuster mood disorder drug Zyprexa. While this setback was significant, Lilly remained committed to its mission of developing innovative treatments for patients in need. The company continued to invest in research and development, leading to the creation of groundbreaking therapies such as Trulicity, a once-weekly injectable medication for the treatment of type 2 diabetes.
Pioneering New Treatments and Driving Growth
In recent years, Eli Lilly and Company has continued to push the boundaries of pharmaceutical innovation. In 2022, the company hit the jackpot with tirzepatide, a new type of GLP-1 receptor agonist sold under the brand name Mounjaro for the treatment of type 2 diabetes. The same formula was approved for the treatment of obesity in 2023, competing with Novo Nordisk’s Wegovy. The success of these drugs has driven significant growth for Lilly, with its stock price nearly doubling in the past year. As of 2024, Lilly is the largest healthcare company in the world, with a market capitalization of over $800 billion, and is on track to become the first trillion-dollar healthcare company in history.
Overcoming Legal Challenges
Addressing the Zyprexa Controversy
In 2009, Eli Lilly and Company faced a significant legal challenge when it was fined over $1.4 billion for illegally marketing its blockbuster mood disorder drug, Zyprexa. This fine, the largest in US history at the time, was a result of the company’s off-label promotion of the drug for uses not approved by the FDA. The controversy surrounding Zyprexa highlighted the importance of ethical marketing practices and compliance with regulatory guidelines in the pharmaceutical industry.
Implementing Robust Compliance Measures
In the wake of the Zyprexa controversy, Eli Lilly and Company took decisive steps to strengthen its compliance measures and ensure that similar incidents would not occur in the future. The company implemented a comprehensive compliance program, which included enhanced training for employees, stricter oversight of marketing activities, and regular audits to identify potential issues. These measures demonstrated Lilly’s commitment to operating with integrity and maintaining the trust of patients, healthcare providers, and regulators.
Focusing on Transparency and Collaboration
To further address the concerns raised by the Zyprexa case, Eli Lilly and Company also focused on increasing transparency and collaboration with key stakeholders. The company engaged in open dialogue with patient advocacy groups, healthcare professionals, and government agencies to better understand their perspectives and address their concerns. By fostering a culture of transparency and collaboration, Lilly aimed to rebuild trust and demonstrate its dedication to responsible corporate citizenship in the pharmaceutical industry.
Reaching New Heights in the 21st Century
Groundbreaking Diabetes and Obesity Treatments
In 2022, Eli Lilly and Company achieved a major milestone with the introduction of tirzepatide (sold under the brand name Mounjaro), a novel GLP-1 receptor agonist for the treatment of type 2 diabetes. This innovative drug quickly gained traction in the market, competing with Novo Nordisk’s Ozempic. The following year, tirzepatide was approved for the treatment of obesity, entering into competition with Novo Nordisk’s Wegovy. The success of these groundbreaking treatments has propelled Lilly to new heights, with its stock price surging by nearly 100% in the past year.
Unprecedented Growth and Market Dominance
The tremendous success of tirzepatide has positioned Eli Lilly and Company as the world’s largest healthcare company, boasting a market capitalization of over $800 billion as of 2024. Wall Street analysts project that the GLP-1 receptor agonist class alone will generate a staggering $13 billion in revenue for Lilly this year. This unprecedented growth has put the company on track to become the first trillion-dollar healthcare company in history, solidifying its position as a global leader in the pharmaceutical industry.
Investing in Research and Development
Eli Lilly and Company’s success in the 21st century can be attributed to its unwavering commitment to research and development. The company continues to invest heavily in its pipeline, focusing on the discovery and development of innovative treatments for a wide range of medical conditions. By leveraging cutting-edge technologies, such as artificial intelligence and precision medicine, Lilly is poised to maintain its leadership position and continue delivering life-changing therapies to patients around the world.
