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LIFESCIENCELEADER.COM 27 JUNE 2014 The Perfect Balance Between Timing, Quality and Value Accelerate your program from DNA to Commercialization CMC Biologics will accelerate the development of your biopharmaceutical SURJUDPIURP'1$WKURXJKFRPPHUFLDOL]DWLRQZLWKRXWVDFUL¿FLQJTXDOLW\RU increasing your project costs. Strike the perfect balance for your project by choosing CMC Biologics as your development and manufacturing partner. United States +1 425 485 1900 Europe +45 7020 9470 www.cmcbiologics.com Visit us at Bio International at Booth 1137 – Hall A June 23-26 San Diego, CA our operating cash flow below $4 billion, and we would maintain the dividend at least at its current level. I'm not sure there were a lot of believers that day, but we've stuck to those promises." With one minor caveat — the revenue guidance this year is $19.4 billion to $20.0 billion, though net income would be at least $2.9 billion — Lilly made all targets set in 2009. Although he says, " We're not ready to declare victory yet," Lilly 's stock price hit a multi-year high the day before our interview. "I believe investors are starting to see that we're coming through the worst of it, that we're a better, stronger company now than we were going in. Obviously, we've had to downsize. We've had to make lots of changes and some adjust- ments to our business. But we are begin- ning to launch products, and investor confidence is coming back because of those aspects." Many, if not most, Big Pharma compa- nies faced with a similar crisis, would have turned to a simple solution: merger or acquisition. But that was one road Lilly was not willing to go down, as Lechleiter explains. " We've studied the whole question of megamergers, or large-scale combinations, going back to the 1990s prior to the loss of the Prozac patent in 2001. We believed then and we believe now that size offers no particular advantage beyond the point where we are today." In other words, he asserts, megamerg- ers are a short-term solution at best, wringing cost synergies from tens of thousands of job losses, but at the price of lingering integration challenges well- known in the industry. " We felt confi- dent that we had the pipeline strength to avoid a large M&A.; If we didn't have the source of innovation through our pipeline, we may have had to make a different choice, but we believed we did possess the needed substrate and that was the best path for Lilly." Megamergers aside, however, Lilly was not averse to acquisitions that it saw as consistent with the path it was on. Lechleiter began his tenure with the 2008 purchase of ImClone — back then, to boost Lilly 's cancer franchise. J O H N L E C H L E I T E R Chairman, President, And CEO, Eli Lilly & Company We felt confident that we had the pipeline strength to avoid a large M&A.; F e a t u r e - C o v e r - L i l l y . i n d d 4 Feature-Cover-Lilly.indd 4 5 / 2 1 / 2 0 1 4 1 2 : 1 6 : 1 6 P M 5/21/2014 12:16:16 PM