Eli Lilly and Co.

pharmaceutical manufacturer

Updated:01-01-2001

The first laboratory of Eli Lilly & Co. opened at 15 West Pearl Street in Indianapolis in 1876.   It grew to become one of the city's largest employers with a sprawling campus of buildings just southeast of the circle.

Eli Lilly and Co. grew from a tiny laboratory in Indianapolis in 1876, to one of the world's largest pharmaceutical companies.

With the creation of the Lilly Endowment, in 1937, the Lilly family also became Indiana's largest benefactor.

Lilly pharmaceuticals have included insulin, the anti-depressant Prozac and Zyprexa, prescribed for some patients with bipolar disorder.

Col. Eli Lilly, a pharmacist who had served as a Union officer in the Civil War, acquired a laboratory on Pearl Street in Indianapolis in 1876 and started Eli Lilly and Co. His innovative process of gelatin-coating pills helped establish the success of the company.

From early in its history the company was a benefactor to the community. In 1893 Col. Lilly chaired a committee to help indigents during that year's financial panic. He also donated money to build a children's hospital.

When Eli Lilly died in 1889, his son Josiah K. Lilly Sr. took control of the company. Josiah inherited his father's civic mindedness and ordered the company to send much needed medicine to the site of the 1906 San Francisco earthquake.

In 1919, Lilly hired biochemist George Henry Alexander Clowes as director of biochemical research. Clowes' negotiations with researchers who developed insulin at the University of Toronto helped launched the first successful large-scale production of insulin in 1923. The success of insulin enabled the company to attract well-respected scientists and, with them, make more medical advances.

Eli Lilly, the grandson of Col. Lilly, was named president in 1932.

In 1934, the company made its first venture overseas when a Lilly office was opened in England. World War II brought production at Lilly to a new high with the manufacturing of Merthiolate and blood plasma. In 1943, full-scale production of penicillin began.

Eli Lilly International Corp. was formed in 1943 as a subsidiary to encourage business trade abroad. In 1945, a new plant on South Kentucky Avenue opened and by 1948 Lilly employed nearly 7,000 workers. Also in 1948, Eli Lilly relinquished the presidency to his brother Josiah Lilly Jr.

In 1952, the first public shares of stock were offered and, in 1953, Eugene N. Beesley was named president. He was the first non-family member to run the company.

Lilly continued to expand. In 1950, Tippecanoe Laboratories, in Lafayette, Ind., increased antibiotic production. In 1969, a new plant opened in Clinton, Ind. In 1960, Elanco Products Co. was formed for the production of veterinary pharmaceuticals. In 1968, Lilly Research Centre Ltd. near London, England, was built. It was the company's first research facility outside the United States.

Lilly made an uncharacteristic, but ultimately profitable, move in 1971 when it bought cosmetic manufacturer Elizabeth Arden for $38 million. Sixteen years later, Lilly sold Arden was sold to Faberge in 1987 for $657 million.

Richard Wood was named CEO of Lilly in 1973. During the 1970s and 1980s, Eli Lilly &. Co. saw a flurry of drug production: antibiotic Keflex in 1971; heart drug Dobutrex in 1977; Ceclor - which would become the world's top selling oral antibiotic - in 1979; leukemia drug Eldisine; antiarthritic Oraflex; and analgesic Darvon.

Lilly ventured into medical instruments through the acquisition of IVAC Corp., which manufactures vital signs and intravenous fluid infusion monitoring systems. Lilly also purchased Cardiac Pacemaker, a manufacturer of heart pacemakers.

But not every Lilly venture was successful. Oraflex, the American version of Benoxaprofen, was withdrawn from the market in 1982 - just one month after gaining FDA approval. A British medical journal found five cases of death due to jaundice in patients taking the drug and the FDA accused Lilly of supressing unfavorable research findings. In 1985, the U.S. Justice Department filed criminal charges against the company and Dr. William Ian H. Shedden. Lilly pleaded guilty to 25 criminal counts and paid a $25,000 fine.

Lilly was also cited in lawsuits filed against the manufacturers of diethylstilbestrol (DES), a drug prescribed to women in the 1940s and 1950s to prevent miscarriages. The company was ordered to pay $400,000 to the first male seeking damages from DES.

Eli Lilly launched Humulin in 1982, making it the first company to market a genetically engineered product.

In 1985, the controversial antidepressant drug Prozac was marketed in Belgium, and in 1988 it was introduced in the United States. By 1999 sales of Prozac exceeded $28 billion.

In August 2000, the U.S. Court of Appeals ruled that a generic drug company could begin making a Prozac substitute nearly three years earlier than planned. The ruling, which shortened Lilly's patent protection on Prozac from December 2003 to Feb. 2 of 2001 (later extended to Aug. 2, 2001), was a financial blow because Lilly was deriving one quarter of its sales from Prozac.

In Nov. 2000, the Food and Drug Administration granted a pediatric extension for Prozac, extending the protection to August 2, 2001. The extention was allowed under the FDA Modernization Act of 1997, giving companies an incentive to broaden their research on the effects of drugs on children.

In 1989, a joint agri-chemical venture between Elanco Products Co. and Dow Chemical created DowElanco . In 1997, Lilly sold its 40 percent share in the company to Dow for $1.6 billion.

In 1991, Vaughn Bryson was named CEO. During his 18-month tenure, the company reported its first quarterly loss ever. Randall Tobias, former vice-chairman of AT&T, was named Bryson's replacement in 1993. He was the first official recruited outside of the company.

Sidney Taurel, former chief operating officer of Lilly was named CEO in 1998, replacing Tobias. Taurel was named chairman in January 1999.

Eli Lilly & Co. announced a major expansion plan in July 1999, totaling $1 billion and expected to create 7,500 jobs over 10 years.

In March 2000, the U.S. Food and Drug Administration approved Zyprexa for the short-term treatment of acute manic episodes associated with bipolar disorder. By the end of 2000, the new drug had passed Prozac in quarterly sales for Lilly.