Eli Lilly 2012 Annual Report Download - page 28

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future. In addition, changing currency values can either favorably or unfavorably affect our financial position,
liquidity, and results of operations. We mitigate foreign exchange risk through various hedging techniques
including the use of foreign currency contracts.
Available Information on Our Website
We make available through our company website, free of charge, our company filings with the SEC as soon as
reasonably practicable after we electronically file them with, or furnish them to, the SEC. These include our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy
statements, registration statements, and any amendments to those documents. The company website link to
our SEC filings is http://investor.lilly.com/sec.cfm.
In addition, the Corporate Governance portion of our website includes our corporate governance guidelines,
board and committee information (including committee charters), and our articles of incorporation and by-
laws. The link to our corporate governance information is http://investor.lilly.com/governance.cfm.
We will provide paper copies of our SEC filings free of charge upon request to the company’s secretary at the
address listed on the front of this Form 10-K.
Item 1A. Risk Factors
In addition to the other information contained in this Form 10-K, the following risk factors should be
considered carefully in evaluating our company. It is possible that our business, financial condition, liquidity,
or results of operations could be materially adversely affected by any of these risks.
• Pharmaceutical research and development is very costly and highly uncertain; we may not succeed in
developing or acquiring commercially successful products to replace revenues of products losing
patent protection. There are many difficulties and uncertainties inherent in pharmaceutical research and
development and the introduction of new products. There is a high rate of failure inherent in new drug
discovery and development. To bring a drug from the discovery phase to market typically takes a decade
or more and often costs well in excess of $1 billion. Failure can occur at any point in the process,
including late in the process after substantial investment. As a result, most funds invested in research
programs will not generate financial returns. New product candidates that appear promising in
development may fail to reach the market or may have only limited commercial success because of
efficacy or safety concerns, inability to obtain necessary regulatory approvals and payer reimbursement,
limited scope of approved uses, difficulty or excessive costs to manufacture, or infringement of the
patents or intellectual property rights of others. Regulatory agencies are establishing increasingly high
hurdles of efficacy and safety for new product approvals; delays and uncertainties in the FDA approval
process and the approval processes in other countries can result in delays in product launches and lost
market opportunity. In addition, it can be very difficult to predict sales growth rates of new products.
• We face intense competition from multinational pharmaceutical companies, biotechnology companies,
and lower-cost generic manufacturers. We compete with a large number of multinational
pharmaceutical companies, biotechnology companies, and generic pharmaceutical companies. To
compete successfully, we must continue to deliver to the market innovative, cost-effective products that
meet important medical needs. Our product revenues can be adversely affected by the introduction by
competitors of branded products that are perceived as superior by the marketplace, by generic versions of
our branded products, and by generic versions of other products in the same therapeutic class as our
branded products. See Item 1, “Business—Competition,” for more details.
• Our long-term success depends on intellectual property protection; if our intellectual property rights
are invalidated or circumvented, our business will be adversely affected. Our long-term success
depends on our ability to continually discover, develop, and commercialize innovative new pharmaceutical
products. Without strong intellectual property protection, we would be unable to generate the returns
necessary to support the enormous investments in research and development and capital as well as other
expenditures required to bring new drugs to the market.
Intellectual property protection varies throughout the world and is subject to change over time. In the
U.S., the Hatch-Waxman Act provides generic companies powerful incentives to seek to invalidate our