by Christopher Freeburn | July 18, 2013 9:22 am
Struggling pharmaceutical giant Eli Lilly (LLY) is desperate to trim costs as it faces a bumpy future.
The company announced that it would halt raises to employees’ base pay in 2014, though those could resume the next year. Bonuses to be paid in 2015, based on performance next year, will also be cut, Reuters notes.
A company executive called the move “a difficult, but necessary decision.” The pay freeze and bonus cuts are expected to save $400 million over the next two years. Eli Lilly has forecast a 20% drop in annual revenue in 2014 as it loses patent protect on critical drugs.
Next year, generic versions of its osteoporosis drug Evista are expected to hit the market, while the patent on its Cymbalta anti-depressant expires.
In February, the company stopped development of tabalumab, its rheumatoid arthritis drug, after a late-stage trial returned poor results.
Shares of Eli Lilly were flat in pre-market trading on Thursday.
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