Lilly Covance Strategic Alliance From Vision to Results. Adrienne Takacs, PhD Jonathan Koch, MBA
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1 Lilly Covance Strategic Alliance From Vision to Results Adrienne Takacs, PhD Jonathan Koch, MBA
2 Topics 1. Lilly s Challenge... a Partnership Opportunity 2. Our Landmark Agreement 3. A Local Success Story 4. Managing the Alliance 5. Delivering Results 6. Keys to Success 2
3 Lilly s Challenge Strategically Transform our R&D business model without disruption to the core business or pipeline flow Maintain employee morale through the rapid pace of change Achieve strategic objectives through stronger partner relationships Operationally Fixed infrastructure decreases degrees of freedom and flexibility Divest asset or responsibilities to partner without disrupting portfolio flow Achieve business objectives quickly with partner Create win-win scenario for our company and our partners Lilly is transforming from a Fully Integrated Pharmaceutical Company (FIPCO) to a Fully Integrated Pharmaceutical Network (FIPNet) giving greater access to ideas, expertise and resources 3
4 Partnership Opportunity Lilly Transform our R&D business model without disruption to the core business or pipeline flow Maintain employee morale through the rapid pace of change Achieve strategic objectives through stronger partner relationships Covance Deliver Operational & Service Excellence Through our: People... Process... Clients Philosophy Integrating Services to Improve R&D Productivity Build Strategic Partnerships Lilly and Covance A relationship built on a foundation of Quality and Trust for over 22 years 4
5 A Landmark Agreement DISCOVERY DEVELOPMENT COMMERCIALIZATION RESEARCH PRE-CLINICAL PHASE I PHASE II PHASE III PHASE IV Non-GLP Toxicology, In Vivo Pharmacology, Imaging Antibody & Research Products Nonclinical Safety Assessment Analytical Services Clinical Pharmacology Clinical Development Central Laboratory Services After signing a Strategic Alliance Agreement in August of 2008, Lilly and Covance collaborated on over 3,800 studies in 2009 spanning drug development from Discovery through Phase 3 Clinical Trials 5
6 Success in Greenfield Seamless transition of site, staff (264), and support in October of 2008 Over 3,000 studies conducted for Lilly 98% of former Lilly staff accepted positions with Covance 95%+ annualized retention of staff 6
7 Life Sciences Growth in Indiana Employment Covance has added over 70 staff in Greenfield since the transition with plans to add up to another 315 employees over the next three years Covance Central Laboratory Services (Indianapolis) has added 25 staff during the same period Growth in Services and Client Base Three new Covance services have been added in Greenfield: Covance s Biomarker Center of Excellence, Nutritional Chemistry, and Biotechnology Services Over 20 clients are now being supported through services being conducted at the site 7
8 Foundational Alignment & Strong Governance Value Creation Reliable Delivery Quality Strategy Implementation & Oversight Execution Executive Steering Committee (ESC) Business Operating Committee (BOC) Business Unit Steering Committees (BUSC) 8
9 1000 Days to the Patient (1000D2P) Productivity Early Examples of Impact Toxicology study report timelines Protocol Approval End of IND/CTA Approval Number of Days First Human Dose Start of Phase 1 Study Process Improvements 21 Days Likely Saved First In Human study start timeline 9
10 Partnership Success Factors Executive support and ongoing participation Mutual understanding of both partners strategic needs and core competencies Established governance and operating structure Clearly defined expectations, roles, and responsibilities Defined operational processes, systems, and measures of performance Flexible and adaptable attitude combined with open/honest and frequent communication Willingness to make partnership work 10
11 Summary The Lilly / Covance partnership is an excellent example of Lilly s FIPNet strategy delivering results Strong cultural alignment and a shared focus on quality set the stage for expanding the relationship in ways that benefit patients, the companies, and our communities Despite the complexity, broad scope, and potential risk associated with the Greenfield transfer it was a tremendous success Even though it has only been fifteen months since the expansion of our partnership, meaningful progress has been made in advancing our strategic imperatives related to cycle-time and productivity 11
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