Reports from America claim Eli Lilly is set to reduce its sales force in the US by nearly a third ahead of key patent expiries for Cymbalta and Evista.

According to the Wall Street Journal, up to 1,000 sales staff will be made redundant by the end of July as the company combats falling revenues streams.

It’s believed that the job losses will come from a combination of internal sales staff and contractual workers, claimed a person “familiar with the matter”, the paper said.

Cymbalta and Evista earned the company $6bn in sales last year, around 43% of overall US sales for the Indianapolis-based company. But those sales are expected to fall significantly when Cymbalta, a treatment for depression and anxiety, is exposed to generic competition in the US this year and osteoporosis treatment Evista follows in 2014.

Lilly has already lost around $5bn in sales after its schizophrenia drug Zyprexa lost patent protection and its pipeline has so far failed to produce any potential new ‘blockbuster’ brands.

Eli Lilly anticipates global revenue of between $22.6 billion and $23.4bn in 2013, despite the loss of exclusivity on Cymbalta in the US and paying royalties on worldwide sales of Byetta.

The company hopes revenue growth will be driven by its drug portfolio, animal health products and sales in Japan and the emerging markets, in particular China.

John C Lechleiter, Chairman, President and CEO, said the company has “made substantial progress in recent years” and he expects “2013 to continue that trend.”

Total operating expenses within the next 12 months are expected to be “flat to slightly decreasing” as Lilly continues to control expenses and improve productivity. It expects to spend between $7.1bn to $7.4bn on marketing, selling and administrative expenses and a further $5.2bn to $5.5bn on research and development.

Lilly expects other income and deductions to be somewhere in the range of $340 million and $490 million of net income in 2013. Operating cash flows of around $900 million will be in place to fund potential business development, pay company dividends and complete its share repurchasing programme.

“We are replenishing and advancing our pipeline, which now has 13 potential new medicines in Phase III testing,” said John C Lechleiter. “We are investing to drive growth in key currently marketed brands and in our counter-cyclical growth areas; and we continue to make productivity gains across our business to fund the R&D necessary to fuel our future growth, recapitalise our physical assets, maintain our dividend and support our share repurchase programme.”

The Indianapolis-based company also predicted it was “on track” to meet medium term financial targets. “From now through 2014, on an annual basis we still expect revenue to be at least $20 billion, net income to be at least $3 billion, and operating cash flow to be at least $4 billion,” said Derica Rice, Lilly Executive Vice President, Global Services and Chief Financial Officer.

Eli Lilly saw global revenue fall by 4% in the first quarter of 2012 after sales of its atypical antipsychotic drug Zyprexa decreased by more than half due to generic exposure.

Revenues totalled $5.6 billion as sales increased by 41% in China but flat lined in the US and decreased outside America by 9% after Zyprexa lost exclusivity in all major markets bar Japan.

John C. Lechleiter, Lilly’s Chairman, President and CEO, says the Q1 figures represent a “solid start” to the year and despite the Zyprexa losses “demonstrated strong underlying growth in other products and key regions”.

Lilly expects to lose in the region of more than $3bn in Zyprexa sales but still record revenue this year between $21.8bn and 22.8bn.

It hopes the reduction in revenue generated by Zyprexa will be offset by growth in other key brands such as Cymbalta, Humalog, Humulin and newer products including Effient and Axiron.

In the first three months of the year, Cymbalta generated sales of $1.1 billion, an increase of 23% on the same period in 2011. Alimta sales were up 5% to $606.8m, Humalog generated $590.3m and revenue for Cialis, Humulin, Forteo, Strattera and Effient also increased.

But it was the 56% loss of sales on Zyprexa which saw global revenue fall as the former blockbuster totalled $562.7m in Q1. Sales of Evista also dropped 4% to $256.2m in the quarter.

The Indianapolis-based company’s total operating expenses increased by 3% compared with the 2011 Q1 after it continued its R&D-based strategy.

“We strongly believe that our innovation-based strategy will enable Lilly to return to steady growth following a period of multiple patent expirations,” said John C. Lechleiter.

Eli Lilly Chief Executive John Lechleiter believes his company needs to focus on exploiting the potential of its pipeline instead of making drastic cost savings to overcome revenue loss.

Speaking at the annual meeting of the Pharmaceutical Research and Manufacturers of America in Boston, the CEO said that savings alone would not be enough to tackle the challenges of generic competition on its two main products.

“I don’t think we can save our way out of the enormous challenge we face,” he said. “The best course is to maintain our focus on advancing our pipeline.”

Lilly expects to lose up to $3bn this year after its psychotic disorder drug Zyprexa lost patent protection in a number of major markets. Gemzar was also exposed to generic competition for the first time last year. Exclusivity for its depression treatment Cymbalta is also set to end in 2013.

The company’s leading experimental product is solanezumab, used to treat Alzheimer’s disease. It is currently in Phase III trials. Analysts have predicted the drug could be a “lottery ticket” for Lilly if approved, and generate sales of up to $9 billion by 2020.

Mr Lechleiter insists the success of solanezumab will not define the future of the pharmaceutical company and revealed the company was developing other treatments for Alzheimer’s. “Lilly’s future does not depend on solanezumab,” he said. “While we hope the molecules that we take into Phase 3 will be successful, we’ve said all along this is a high-risk program.

“We have other approaches and other molecules in our pipeline that we will continue to move forward.”

Despite the CEO’s savings claim, Lilly decided to impose a global salary freeze for the majority of its employees to help it manage the ‘patent cliff’ in February 2012.

Eli Lilly expects to lose $3bn in 2012 after its psychotic disorder drug Zyprexa lost its patent protection in a number of major markets.

But the company still expects to generate revenue of between $21.8bn and $22.8bn next year due to the growth of its key franchises and new products such as Effient, Axiron and Tradjenta.

John C. Lechleiter, Chairman, President and CEO, said 2012 is an “important year” for the company and revealed Lilly had been preparing for the loss of Zyprexa’s exclusivity to return to sustained growth in 2014.

Zyprexa’s exclusivity ended in most markets outside of Japan at the end of last year. Lilly hopes brands such as Cymbalta, Cialis, Humalog, Humulin and Forteo will offset the lost revenue generated by Zyprexa and has invested in its pipeline and brands with long standing exclusivity, and attempted to improve productivity levels to fund R&D and future growth.

“First and foremost, we are replenishing and advancing our pipeline,” said Mr Lechleiter. “We've successfully rebuilt our mid- to late-stage pipeline to position Lilly for growth post-2014, with 12 assets now in Phase III, exceeding our goal of 10 by the end of 2011. We continue to revamp our discovery efforts to ensure a more sustainable flow of innovation for the long-term.

“Second, we're investing to drive growth in the key brands that don't lose patent protection during this period and in our countercyclical growth engines that don't have the same cycle of patent expirations as our US and European pharmaceutical businesses. These include Japan, select emerging markets and our animal health business. Third, we continue to drive productivity gains across our business to fund the R&D necessary to fuel our future growth, recapitalise our physical assets and maintain our dividend at least at its current level.”

Within the company’s forecast it also anticipates that gross margin as a percentage of revenue will be approximately 77%; operating expenses will be essentially flat compared to 2011 as a result of ongoing productivity efforts; marketing, selling and administrative expenses are expected to be flat to declining; R&D expenses will be between $5bn and $5.3bn and operating cash flows of approximately $800m will fund capital expenditures, as well as the company’s business development activity and its dividends.

“We remain on track to meet or exceed the mid-term minimum financial performance outlined this past June,” said Derica Rice, Lilly Executive Vice President, Global Services and Chief Financial Officer. “From now through 2014, on an annual basis we still expect revenue to be at least $20 billion, net income to be at least $3 billion, and operating cash flow to be at least $4 billion.”

Profits at Eli Lilly fell 5% in the third quarter of 2011 to $1.24 billion despite revenue increasing nearly 10% to $6.15bn.

Strong sales performances by Cymbalta, Humalog, Forteo, Strattera, Cialis (pictured) and Alimta boosted revenue, although sales of Zyprexa and Gemzar were down after they faced generic competition for the first time.

John Lechleiter, CEO, Lilly, says that the company is “well-prepared” to meet the “challenges before us” as it prepares to face the loss of patent exclusivity on the two brands.

Zyprexa’s sales generated $1.18bn during the quarter, a decrease of 3% compared to the same time last year, after revenue dropped in the US by $563.2 million. It will lose its exclusivity in the US this month after the patent expired in Europe in September.

But with the introduction of cheaper generic copies, Lilly says it now expects a "rapid and severe decline in Zyprexa sales".

Sales in other divisions of the company boosted overall profits, especially in animal health where sales were up 28% compared with Q3 of 2010.

As a result in the drop in profits, Lilly did not raise its full-year profit forecast but Damien Conover, a financial analyst at Morningstar, said the “sales look reasonably good”.