Exclusive: Lilly CEO defends spending R & D

By Ransdell Pierson

WASHINGTON. Thursday, June 30, 2011 12: 00 am EDT

WASHINGTON (Reuters) - Eli Lilly and Co (LLY.)(N) is committed to spend what it takes to arrive at innovative drugs in the long term, said the Chief Executive, even if the income of the company are expected to tumble over the next three years.

"It would be a mistake for us to divest a significant R & d," CEO John Lechleiter says in an interview.

"As a company that focuses on innovation and research for new treatments and cures, it is important that we maintain a sustained approach and a consistent approach by investing in R & D and I am confident, it will be profitable," Lechleiter told Reuters on the sidelines of the International Convention Bio Washington.

In a discussion group earlier at the convention, the CEO is surprised that other large cash recently took axes to their research budget to increase profits in the short term for shareholders.

"I never thought that I would live to see this, but investors are really thinking about cutting R & D - which is the subject of the day," he said. "It's kind of nuts, but it is what is be talked about."

Lechleiter, which started as a chemist for the company 32 years ago, is

supposed to defend his research spending when the drugmaker meeting later today with hundreds of analysts and investors.

They will be eager to hear how profitability will be reduced on the runway as a few more great contest face of Lilly of cheaper generic drugs.

Pfizer Inc. (PFE).(N) in February, has announced that it slash up to 2 billion dollars of its R & D budget and eliminate thousands of research staff to make promises of gains to shareholders.

Lechleiter refused to comment on the rival specific, but great said focused on spending cuts earnings can throw compliance research organizations.

"It is crazy;" "first of all, by definition it is an industry focused on the research and development," he said.

"We spend as an industry more on R & D, as a percentage of sales, most likely in any other industry." It is long-term investments, and it is important to maintain a consistent to invest in research and thoughtful approach. It is very difficult when you go through many ups and downs.

"The result will make a difference for shareholders Lilly is our ability to launch new precious drugs that will allow us to replace and grow our revenue base as we have these patents expired," he said.

"NOT OUR DARKEST HOURS.

Lilly in April, said that worldwide sales of its first quarter increased by 6% 5,84 billion, fueled by sales of its prescription drugs.

But he predicted a decrease in revenue for the year from 9 to 12%, aware that 5 billion a year Zyprexa schizophrenia drug will be ravaged by the less expensive generic starting in October.

The cancer drug Gemzar lost half of its sales of generic drugs in the year past and best selling of the company Cymbalta antidepressant and Evista for osteoporosis treatment will face generic by 2014.

The drugs were considered as when they were introduced there is ten years, major advances or image longer Lilly and burnishing as an innovator long after it introduced the first modern antidepressant Prozac.

Although the company did not develop many large vendors in recent years, Lechleiter expressed confidence that many drugs 70 company now in human trials will be successful, restore earnings and prove continuous Lilly Research prowess.

"To compensate for some of the sadness which seems to hang on in this industry, it comes to our darkest hours, I think that has never been a time more likely."

(Editing by Muralikumar Anantharaman;) Reuters Messaging: ransdell.pierson.reuters.com@reuters.net; 646-223-6034; ((Ransdell.Pierson@Reuters.com))

Yellen Fed defends de2, said the creation of 3 million jobs (Reuters)

DENVER (Reuters) - reserve Federal Vice President Janet Yellen Saturday defended program controversial Central Bank to acquire assets in order to stimulate the economy, citing an internal study showing that the full program will result in a gain of 3 million jobs.

"It will not be a panacea, but I think it will be effective to promote the maximum employment and price stability" Yellen said while participating in a panel of experts for a Conference of the economy.

Plane the Fed buying goods announced at the beginning of November - nicknamed de2, because it is the second round of the quantitative easing - Fed had attracted critical nationally, internationally and even in the Fed itself, the weakening of the dollar and risking dangerous inflation.

Yellen, defence appeared aims to destroy all these critics, said a simulation approaching the asset purchase program latest has been shown to generate approximately 700,000 new jobs.

This exercise assumed purchasing $ 600 billion in treasuries to longer term, their detention for about two years and then conduct the position in the next five years.

The study also indicates that inflation is currently higher percentage point would have been the case, implying that if the Fed had not purchased titles long term after cutting interest rates to near zero in December 2008, the economy would now close to a damaging deflationary spiral.

Yellen, who became Vice President of the Fed in October, was known to be a strong supporter of energetic measures to strengthen economic growth in his position previous President of the San Francisco Fed. It concerns de2 will cause inflation, imbalances, or having a damaging competitive devaluation are lost.

Addressing a default cited by critics, that the program is falling short in its objective to reduce the yields on securities Treasury Yellen said that, although rates are higher at the beginning of the program, they are lower than they would have otherwise been long term. She also yields are higher, because now investors expect a more robust recovery.

Apparent scale-back by investors of the expectations that the Fed won't expand the program beyond its supports of planned end mid-year argument that purchases have helped maintain lower rates, Yellen says.

She noted that policy-making federal open market Committee the Fed is not only about 2% higher inflation and can and will act quickly to respond to any increase in inflation.

"The Committee remains resolutely committed to price stability and does not seek inflation above 2% or a little less than that, most FOMC participants see as compatible with the mandate of the Federal Reserve," she says.

(Reporting by Mark Felsenthal.) (Editing by Leslie Adler)

The German Finance Minister defends euro (the Arizona Republic)

"BERLIN (AP) - the German Finance Minister is quoted with an emphasis on the fact that the European common currency will not miss warning than betting against the euro" would succeed. "Wolfgang Schäuble published Sunday in Bild am Sonntag comments come every week ahead of a Summit of the Union European this week is to concentrate on the establishment of a mechanism for permanent Nations in the euro crisis from 2013.Schaeuble stressed 16 members of the euro area has accepted the common currency is beneficial to their finances and" for this reason we will successfully defend it. " "The euro came under pressure because the Ireland tapped into a relief fund billion euro750 following Greece.