Ultimately, the future of Lilly depends on bringing to patients new medicines—whether developed in our own labs or from outside our walls. This requires the innovation and development of new strategies to speed the delivery of medicines. It’s critical to our success as a company, and to the patients we serve.
That’s why Lilly has added a new approach to its drug-development strategy. This approach—unique to pharmaceutical companies—uses external venture capital and the company’s own virtual drug development organization, called Chorus, to expedite the development of compounds from Lilly and outside companies.
In typical drug development, a large number of compounds fail to make it past Phase II clinical trials. Chorus has developed more cost-effective and faster methods to reach clinical proof of concept—that is, to determine if a candidate drug is likely to be effective. That helps us determine whether to invest further in the most promising compounds.
Established in 2002, Chorus is a small, multidisciplinary drug-development group within Lilly that conducts early-stage development work. Chorus operates on a “virtual” model: It consists of a group of Lilly employees that manages drug-development work done by a network of hundreds of external experts and companies from around the world.
Chorus focuses on designing and executing highly focused development plans that progress compounds from candidate selection to clinical proof of concept in human clinical trials. Using this approach, Chorus has been able to reach decisions about 12 months earlier and at about half the cost of the current industry model.
To date, Chorus has delivered data on 17 molecules. Six of these have resulted in positive proof-of-concept clinical data. And we are applying the lessons learned from Chorus to our Development Center of Excellence, which manages the clinical development of all Lilly investigational compounds.
Lilly has designed, and is investing in, several venture capital funds—dubbed the Mirror Funds—created to supplement the company’s pipeline and expand access to innovation. The funds will license drug candidates from Lilly and other companies and pay for clinical development and testing to take the compounds through the clinical proof-of-concept stage.
Our venture-capital partners get access to Chorus and Lilly molecules from the pipeline, and they share in the profits from successfully developed drugs. As an investor, Lilly also shares in fund profits. As of August 2011, one of the independent venture-capital firms participating in the Mirror Portfolio has acquired four molecules and will oversee the next phase of their development. Three of those molecules were developed preclinically by researchers at major academic institutions and are being studied as potential treatments for cardiovascular, diabetes, and oncology indications; the fourth molecule was developed by Lilly and is being studied for its potential in bone healing and cancer.
Lilly retains rights to buy back all Lilly molecules licensed by the funds as well as to evaluate and acquire a limited number of external compounds. Within five to seven years, the funds are designed to pay for the development of a pipeline of compounds that “mirrors” the number of compounds at this stage of development in Lilly’s own pipeline.