Eli Lilly CEO John Lechleiter to retire at end of year, replaced by David Ricks

Eli Lilly announced Wednesday that CEO John C. Lechleiter will retire from his position at the end of the year, replaced by David A. Ricks, current president of Lilly Bio-Medicines. Lechleiter, who has served as chief executive since April 1, 2008, will also step down as president, while continuing to serve as non-executive chairman until May 31, 2017, at which time he will leave the board.

Commenting on the news, SunTrust Robinson Humphry analyst John Boris said "this is a very smooth transition," adding that Lechleiter "was the architect for the turnaround for Lilly as it went through its most difficult patent-expiration period, and then he restocked the cabinet."

The company indicated that its board of directors unanimously elected Ricks to assume the role of president and CEO, joining the board at the start of 2017, while becoming chairman of the board on June 1 next year. "As Lilly transitions from our recent challenging period of patent expirations to a new era of growth, it is the logical time for a transition in company leadership," Lechleiter remarked, adding "Ricks is a capable, decisive and energetic leader who is very well prepared to succeed me as CEO."

Lechleiter continued that Ricks "brings to the role broad experience in Lilly's commercial operations along with an appreciation and understanding of research and development." The current CEO noted that Ricks "previously led Lilly's business operations in Canada, China, and the US," while "he has successfully guided...Lilly Bio-Medicines, through a period of profound change."

Meanwhile, Ricks said "Lilly has the right strategy. We've built a strong pipeline and have a promising portfolio of recently approved new medicines. Navigating major patent expirations in recent years, we've sharpened our focus and improved our vigilance and agility." The company indicated that Ricks' successor as president of Lilly Bio-Medicines will be announced at a later date.

According to Ricks, there are two major challenges facing Eli Lilly, noting that "the more pressing one is successfully introducing the pipeline’s that’s been built under [Lechleiter's] leadership." The other is focused on continuing R&D efforts to ensure the company doesn't face a major revenue drop in the future. Meanwhile, Lechleiter also cautioned that the outside perception of the drug industry has changed during his time at Eli Lilly. "The expectations on our industry have risen astronomically," Lechleiter said, adding that Ricks "will have to be even more adept at dealing with not only our friends but also those who can be critical of the industry or disagree with us."

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