Paul expanded on the efforts being made in Lilly's research and development organization. "By ramping up our efforts in discovery research, we have nearly doubled the number of new molecules moving into the clinic each and every year. As a result, we have tripled the number of potential new medicines in our clinical pipeline since 2004. Through the acquisition of ImClone and other actions, we have increased our portfolio of biotechnology-based molecules, which now represents over one-third of our clinical-stage pipeline. We are also applying creative approaches to every point in the R&D chain to develop more medicines more quickly at lower cost. Initiatives such as our phenotypic drug discovery program (PD2), numerous risk-sharing collaborations, the early-stage work of our virtual Chorus team and our new Development Center of Excellence will further accelerate development, and increasingly tailor molecules for those patients most likely to benefit from them. Through these efforts, we expect to have at least 10 molecules in Phase III clinical development by the end of 2011 and plan to launch two new medicines per year beginning in 2013 and to sustain a steady flow of innovation thereafter."

Derica Rice, Lilly senior vice president and chief financial officer, provided commentary on the company's current financial performance and forward-looking expectations. "Lilly is completing another year of strong operating performance, delivering solid earnings growth resulting from volume-based sales growth, improving gross margins and tightening control of operating expenses. Looking ahead to 2010, we expect to once again deliver good sales and earnings growth, excluding the potential impact of health care reform legislation in the U.S. We also expect to generate solid cash flow in the coming years to fund continued investment in research and development, as well as to fund our dividend and anticipated business development activity. We continue to expect to deliver low double-digit compound annual earnings-per-share growth between 2007 and 2011. We are taking the steps necessary to prepare our operations for the upcoming challenges of patent expiries. We are committed to becoming leaner, more focused, more customer-oriented and more competitive."

Based on IMS Health data, for the 12 months ending June 2009, Lilly has moved into the ninth spot among the top 10 companies ranked by worldwide pharmaceutical sales. Among these top 10 companies, Lilly was the fastest growing globally and the fastest growing in the United States and major Europe; the fourth-fastest growing in the pharmerging markets; and the sixth-fastest growing in Japan.

The company recently refocused its operations around five business units to create a clear line of sight to the customer. The five business units cover oncology, diabetes, established markets, emerging markets and animal health. The following sections highlight each of these five business units, including the performance of key marketed products and updates on the status of select late-stage and mid-stage pipeline molecules.

SOURCE Eli Lilly and Company