1900s
In 1905, J. K. Lilly oversaw a large expansion of the company, and it reached annual sales of $1 million.
Following the 1906 San Francisco earthquake, the company sent much needed medicine to support recovery efforts.
Before and after World War I, the company experienced rapid growth,[25] including expanded manufacturing facilities at its McCarty Street plant, which improved production capacity with a new Science Building (Building 14), opened in 1911, and a new capsule plant (Building 15) in 1913.[32] In 1913, the company began construction of Lilly Biological Laboratories, a research and manufacturing plant on 150 acres near Greenfield, Indiana.[33][34]
After World War I, the company's expanded production facilities and introduction of new management methods set the stage for Lilly's next crucial phase—its "aggressive entry into scientific research and development." The first big step came in 1919 when Josiah Lilly hired biochemist George Henry Alexander Clowes as director of biochemical research.[35] Clowes had extensive medical research expertise and links to the scientific research community, which led to the company's collaborations with researchers in the US and elsewhere.[36] Clowes's first major collaboration with researchers who developed insulin at the University of Toronto significantly impacted the company's future.[36] Lilly's success with insulin production secured the company's position as a leading research-based pharmaceutical manufacturer, allowing it to attract and hire more research scientists and to collaborate with other universities in additional medical research.[37]
In addition to development of new medicines, the company achieved several technological advances, including automation of its production facilities. Lilly was also an innovator in pill capsule manufacturing. It was among the first manufacturers to insert medications into empty gelatin capsules, which provided a more exact dosage.[10] Lilly manufactured capsules for its own needs and sold its excess capacity to others.[38]
In 1917, Scientific American described Lilly as "the largest capsule factory in the world" and reported that the company was "capable of producing 2.5 million capsules a day".[38] One of Lilly's early innovations was fruit flavoring for medicines and sugar-coated pills to make their medicines easier to swallow.[39] Over the next few years, the company created tens of millions of capsules and pills annually.[27]
Other advances improved plant efficiency and eliminated production errors. In 1909, Eli Lilly, grandson of the company's founder, introduced a method for blueprinting manufacturing tickets,[40] which created multiples copies of a drug formula and helped eliminate manufacturing and transcription errors.[38]
In 1919, Josiah hired biochemist George Henry Alexander Clowes as director of biochemical research.
In the 1920s, Eli introduced the new concept of straight-line production to the pharmaceutical industry, where raw materials entered at one end of the facility and the finished product came out the other end, in the company's manufacturing process. Under Eli's supervision, the design for Building 22, a new five-floor plant that opened in Indianapolis in 1926, implemented the straight-line concept to improve production efficiency and lower production costs.[41][42] One historian noted, "It was probably the most sophisticated production system in the American pharmaceutical industry."[42] This more efficient manufacturing process also allowed the company to hire a regular workforce. Instead of recalling workers at peak times and laying them off when production demand fell, Lilly's regular workforce produced less-costly medicines in off-peak times using the same manufacturing facilities.[42]
During the 1920s, the introduction of new products brought the company financial success.[25] In 1921, three University of Toronto scientists, John Macleod, Frederick Banting, and Charles Best, were working on the development of insulin for treatment of diabetes. Clowes proposed a collaboration with the researchers in December 1921, and then again March and May 1922. The researchers were hesitant to work with a commercial drug firm, particularly since they had the Connaught Laboratories' non-commercial facilities at hand. But as limits were reached at the scale to which Connaught could produce insulin, Clowes and Eli Lilly met with the researchers in 1922 to negotiate an agreement with the University of Toronto scientists to mass-produce insulin.[43][44][45] The collaboration greatly accelerated the large-scale production of the extract.[46]
In 1923, the company began selling Iletin, the company's tradename for the first commercially available insulin product in the US for the treatment of diabetes.[47] Numerous objections were registered by the Insulin Committee of the University of Toronto in regard to Lilly's use of the term "Iletin", although production continued under this name and the objection was later dropped "as a concession".[48][49]
Also in 1923, Banting and Macleod were awarded the Nobel Prize for their research, which they subsequently shared with co-discoverers Charles Best and James Collip.[50][51] Insulin, "the most important drug" in the company's history, did "more than any other" to make Lilly "one of the major pharmaceutical manufacturers in the world." Eli Lilly and Company enjoyed an effective monopoly on the sale of insulin in the US for almost two years, until the first of the new American licensees, Frederick Stearns & Co., entered the market in June 1924.[52]
The success of insulin enabled the company to attract scientists and, with them, make more medical advances. By the company's 50th anniversary in 1926, its sales had reached $9 million and it was producing over 2,800 products.[53]
In 1928, Lilly introduced Liver Extract 343 for the treatment of pernicious anemia, a blood disorder, in a joint venture with two Harvard University scientists, George Minot and William P. Murphy. In 1930, Lilly introduced Liver Extract No. 55 in collaboration with George Whipple, a University of Rochester scientist.[54] Four years later, in 1934, Minot, Murphy, and Whipple were awarded the Nobel Prize in Physiology or Medicine for their research.[55]
In the 1930s, the company also continued its expansion overseas.[56] In 1934, Eli Lilly and Company Limited, the company's first overseas subsidiary was established in London, and a manufacturing plant was opened in Basingstoke.[56] In 1932, despite the economic challenges of the Great Depression, Lilly's sales rose to $13 million. The same year, Eli Lilly, eldest grandson of Col. Lilly who had joined the company in 1909, was named as the company's president, succeeding his father, who remained as chairman of the board until 1948. In his early years at the company, Eli was especially interested in improving production efficiency and introduced a number of labor-saving devices. He also introduced scientific management principles, implemented cost-savings measures that modernized the company,[57] and expanded the company's research efforts and collaborations with university researchers.[58]
Launched in 1930, Lilly developed the vaccine preservative thiomersal (also called merthiolate and thimerosal). Merthiolate was a mercury-based antiseptic and germicide that "had been formulated at the University of Maryland with support of a Lilly research fellowship." In November 2002,[59] congressional Republicans inserted a provision into a domestic security bill that President George W. Bush signed into law which protected Eli Lilly from all suits in federal courts, alleging that thiomersal caused autism and other neurological disorders in children, such that all such matters be heard by a special master appointed for the purpose, rather than regular federal courts. Its toxicology was that it metabolized into ethylmercury (C2H5Hg+) and thiosalicylate in the body. However, since the mid-2000s it has mostly fallen out of use.
In 1934, the firm opened two new facilities in Indianapolis on the McCarty Street complex: a replica of Lilly's 1876 laboratory and the new Lilly Research Laboratories, "one of the most fully equipped facilities in the world."[60][61] As part of its research and product development process Lilly also conducted clinical studies at Indianapolis City Hospital.
Patented by Lilly in 1934, secobarbital is a barbiturate derivative with anesthetic, anticonvulsant, sedative and hypnotic properties. Lilly marketed Secobarbital under the brand name Seconal. Secobarbital is indicated for the treatment of epilepsy, temporary insomnia and as a pre-operative medication to produce anesthesia and anxiolysis in short surgical, diagnostic, or therapeutic procedures which are minimally painful. With the onset of new therapies for the treatment of these conditions, Secobarbital has been less utilized, and Lilly ceased manufacturing it in 1999. Secobarbital gained considerable attention during the 1970s, when it gained wide popularity for recreational drug use. In September 1970, rock music guitarist legend Jimi Hendrix died from a secobarbital overdose. In June 1969, secobarbital overdose was the cause of death of actress Judy Garland. The drug was a central part of the plot of the hugely popular novel Valley of the Dolls (1966) by Jacqueline Susann in which three highly successful Hollywood women each fall victim, in various ways, to the drug. The novel was later released as a film by the same name.
The company provided relief after the 1936 Johnstown Flood.
During World War II, the company expanded production to a new high, manufacturing merthiolate, an organomercury compound, and penicillin, a beta-lactam antibiotic. Lilly also cooperated with the American Red Cross to process blood plasma. By the end of World War II, the company had dried over two million pints of blood, "about 20 percent of the United States' total".[62] Merthiolate, first introduced in 1930, was an "antiseptic and germicide" that became a U.S. Army standard issue during World War II.[63][64][65] During World War II, Lilly manufactured products for military use, including aviator survival kits and seasickness medications for the D-Day invasion as well as penicillin.[66] During World War II, Lilly produced penicillin and other antibiotics, "antimalarials," blood plasma, encephalitis vaccine, typhus and influenza vaccine,
International operations expanded even further during World War II.[56] In 1943, Eli Lilly International Corp. was formed as a subsidiary to encourage business trade abroad. By 1948, Lilly employees worked in 35 countries, most of them as sales representatives in Latin America, Asia, and Africa.[56]
After three generations of Lilly family leadership under company founder, Col. Eli Lilly, his son, Josiah K. Lilly Sr., and two grandsons, Eli Lilly Jr. and Josiah K. Lilly Jr., the company announced a reorganization in 1944 that prepared the way for future expansion and the eventual separation of company management from its ownership.[68]
In 1945, Lilly began a major expansion effort that included two manufacturing operations in Indianapolis. The company purchased the massive Curtiss-Wright propeller plant on Kentucky Avenue, west of the company's McCarty Street operation. When renovation was completed in mid-1947, the Kentucky Avenue location manufactured antibiotics and capsules and housed the company's shipping department.[69] By 1948, Lilly employed nearly 7,000 people.[70]
In 1947, Lilly became the first distributor of methadone in the United States, an analgesic used frequently in the treatment of heroin, opium and other opioid and narcotic drug addictions.[71] It was marketed under the trade name "Dolophine".[72][73] Eli Lilly was able to acquire the right to produce the drug commercially for just $1 because the patent rights of the original patent holders, IG Farben and Farbwerke Hoechst, were not protected after the Allies of World War II seized all German patents, research records and trade names.
In 1948, Eli Lilly, who had served as the company's president since 1932, retired from active management, became chairman of the board, and relinquished the presidency to his brother, Josiah K. Lilly Jr. (Joe).[74] During Eli's 16-year presidency, sales rose from $13 million in 1932 to $117 million in 1948. Joe joined the company in 1914 and concentrated on the company's personnel and marketing efforts.[28] He served as company president from 1948 to 1953, then became chairman of the board, and remained in that capacity until his death in 1966.[75]
Throughout the 20th century, Lilly continued to expand its production facilities outside of Indianapolis. In 1950, Lilly launched Tippecanoe Laboratories in Lafayette, Indiana, Indiana,[76] and increased antibiotic production with its patent on erythromycin.[77]
In 1949, Eli Lilly went into partnership with the United States Army Reserve, setting up a local Strategic Intelligence Research and Analysis (SIRA) Unit to allow employees to research company data for the scientific logistics and Eurasian fields of study.
In the 1950s, Lilly introduced two new antibiotics: vancomycin, a glycopeptide antibiotic, and erythromycin, a macrolide antibiotic.[78] In the 1950s and 1960s, as generic drugs began flooding the marketplace after the expiration of patents, Lilly diversified into other areas, including agricultural chemicals, veterinary medicine products, cosmetics, and medical instruments.
In 1952, the company offered its first public shares of stock, which are traded on the New York Stock Exchange.[79]
In 1953, Eugene N. Beesley was named the first non-family member to become the company's president, beginning the transition to non-family management.[80]
In 1954, Lilly formed Elanco, named after its parent company, for the production of veterinary medicine.[81]
Also in 1954, the National Foundation for Infantile Paralysis, now the March of Dimes, contracted with five pharmaceutical companies, Lilly, Cutter Laboratories, Parke-Davis, Pitman-Moore Company, and Wyeth to produce Salk's polio vaccine for clinical trials. Lilly's selection to produce the vaccine was, in part, due to its previous experience in collaborations with university researchers. In 1955, Lilly manufactured 60% of Salk's polio vaccine.[82]
In 1962, the company acquired The Distillers Company and established a major factory in Liverpool, England. In 1968, Lilly built its first research facility outside the United States, the Lilly Research Centre, in Surrey, England. In 1969, the company opened a new plant in Clinton, Indiana.[76]
During the 1970s and 1980s, Eli Lilly and Company underwent a flurry of drug production, including Keflex, an antibiotic, in 1971, Dobutrex, a cardiogenic shock heart drug in 1977, Ceclore, which ultimately became the world's top selling oral antibiotic, in 1979, Eldisine, a leukemia drug, Oraflex, an arthritis drug, and Darvon, an opioid drug used in pain management.
In 1971, to further diversify its product line, Lilly acquired Elizabeth Arden, Inc. for $38 million. Although Arden continued to lose money for five years after Lilly acquired it, by 1982, Arden's sales were up 90 percent from 1978, with profits doubling to nearly $30 million. In 1987, Lilly sold Arden to Fabergé for $657 million.[83]
In 1972, Richard Donald Wood became Lilly's president and CEO after the retirement of Burton E. Beck.
In 1977, Lilly acquired IVAC Corporation, which manufactures vital signs and intravenous fluid infusion monitoring systems.[84] The same year, Lilly acquired Cardiac Pacemakers, Inc., a manufacturer of pacemakers for $127 million. In 1980, Lilly acquired Physio-Control, a pioneering company in defibrillation. Advance Cardiovascular Systems was acquired in 1984 for $85 million in stock.[85]
Lilly acquired Hybritech in 1986 for $350 million; it was sold to Beckman Coulter in 1995.[86] In 1988, it acquired Devices for Vascular Intervention for $50 million, with the potential for up to another $150 million in contingent payments.[87] Lilly acquired Pacific Biotech in 1990; it was sold to QuidelOrtho in 1995 for $3.95 million.[88] In 1992, Lilly acquired Origin Medsystems, which was developing several devices for use in laparoscopy.[89] Heart Rhythm Technologies was acquired in 1992.
Fluoxetine (Prozac), introduced in 1988, quickly became the company's best-selling product for treatment of depression, but Lilly lost its US patent protection for the product in 2001. Prozac was one of the first therapies in its class to treat clinical depression by blocking the uptake of serotonin within the human brain.[90]
In 1989, a joint agrochemical venture between Elanco and Dow Chemical created DowElanco. In 1997, Lilly sold its 40% share in the company to Dow Chemical for $1.2 billion and the name was changed to Dow AgroSciences.[91]
In 1991, Vaughn Bryson became president and CEO and Wood became board chairman. During Bryson's 20-month tenure as Lilly's president and CEO, the company reported its first quarterly loss as a publicly traded company.[66]
In 1993, Randall L. Tobias, vice chairman of AT&T Corporation and a Lilly board member, was named Lilly's chairman, president, and CEO, the first president and CEO recruited from outside of the company.[92][93]
In 1994, Lilly separated its medical device division.[94][95]
In 1994, Lilly acquired PCS Systems, the largest drug benefits health maintenance organization at the time, for $4 billion.[96][97]
Released in 1996, Zyprexa (Olanzapine) (for schizophrenia and bipolar disorder, as well as off-label uses) (see Illegal marketing of Zyprexa) was the company's best selling drug through 2010, when the patent expired.[98]
In May 1996, the Food and Drug Administration approved gemcitabine (Gemzar) for the treatment of pancreatic cancer. Gemzar is commonly used in the treatment of pancreatic cancer, usually in coordination with 5-FU chemotherapy and radiation therapy. Gemzar also is routinely used in the treatment of non-small cell lung cancer.[99][100]
In 1998, the company dedicated new laboratories for clinical research at the Indiana University Medical Center in Indianapolis.
Sidney Taurel, former chief operating officer of Lilly, was named CEO in July 1998 to replace Tobias, who retired. Taurel became chairman of the board in January 1999.[101] Taurel retired as CEO in March 2008, but remained as chairman of the board until 31 December 2008. John C. Lechleiter was elected as Lilly's CEO and president, effective 1 April 2008. Lechleiter had served as Lilly's president and chief operating officer since October 2005.[102]
In October 1998, Lilly formed a 50-50 joint venture with Icos, a Bothell, Washington-based biotechnology company, to develop and commercialize Tadalafil (Cialis), for the treatment of erectile dysfunction. Lilly agreed to pay Icos an upfront fee of $75 million.[103][104]
