News Release

INDIANAPOLIS, Jan 04, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Eli Lilly and Company announced today that it has entered into settlement agreements with 14 plaintiffs' firms (or groups of plaintiffs' firms) involved in Zyprexa liability litigation to resolve the vast majority of remaining product liability claims against Lilly relating to the medication. These settlement agreements follow a master settlement agreement Lilly entered into in June 2005 that covered approximately 8,000 claimants in the United States, as well as additional settlements of approximately 2,500 claims.

"While we remain confident that these claims are without merit, we took this difficult step because we believe it is in the best interest of the company, the patients who depend on this medication, and their physicians," said Sidney Taurel, chairman of the board and chief executive officer of Eli Lilly and Company. "We wanted to reduce significant uncertainties involved in litigating such complex cases. Our decision to resolve the claims does not change the fact that Zyprexa has and will continue to improve the lives of millions of patients around the world who are suffering from schizophrenia and bipolar disorder. These settlement agreements will enable Lilly to focus first and foremost on addressing unmet medical needs through research, educational programs and partnerships with doctors and patients."

These settlements include federal and state product liability lawsuits that have been brought against Lilly, and claims that were the subject of "tolling agreements" that extended the deadline for potential claimants to file a lawsuit, as well as other unfiled claims against Lilly. The agreements also will result in the dismissal of claims against physicians and other healthcare professionals named as co-defendants in any cases relating to the prescription of Zyprexa covered by this settlement. At this time, the exact number of claimants covered by this settlement cannot be determined, but is estimated to be more than 18,000, representing the vast majority of existing Zyprexa product liability litigation. Approximately 1,200 claims that have been identified to Lilly are not included in this settlement.

For several months, plaintiffs' lawyers have been discussing a possible settlement that would resolve a substantial number of Zyprexa cases. "We are happy that we have been able to negotiate a settlement agreement that we believe is in the best interest of our clients, as well as patients, physicians and caregivers," said Richard Meadow, New York office of the Lanier Law Firm. "Prolonging this litigation further is in no one's best interest."

Taurel said, "The litigation stirred concern for physicians and spread fear among patients and caregivers, which has interfered with the process of physicians making treatment decisions. We want physicians to feel comfortable choosing the medication they believe best meets the treatment needs of their patients with schizophrenia and bipolar disorder."

Most of the lawsuits claim that before September 2003, the information in the package insert, which listed the risk of hyperglycemia and diabetes as an infrequent adverse event since 1996, was not adequately displayed. In September 2003, the Food and Drug Administration required label changes for all atypical antipsychotics that added information about the confounded relationship between these medicines and diabetes. The FDA did not, however, find that a causal relationship exists. The Honorable Jack Weinstein of the Federal District Court for the Eastern District of New York, the judge supervising the Zyprexa multidistrict litigation, stated recently: "The change in Zyprexa's label in September 2003, as ordered by the federal Food and Drug Administration, makes less viable, on statute of limitations grounds, such future cases."

Lilly will continue to vigorously defend Zyprexa in the remaining product liability cases, third-party payer and state cases.

Lilly is not disclosing the terms of the settlement agreements other than to state that the amount to be paid for over 18,000 claims in these settlements is substantially less than the $700 million paid for over 8,000 claims in the June 2005 settlement. As a result of these new settlements, Lilly will record a fourth-quarter 2006 charge for product liability litigation. The amount of the charge is currently under review, but it is not expected to exceed $500 million.

Visit www.ZyprexaFacts.com for additional information about the product liability litigation.

Zyprexa Background

Zyprexa is indicated in the United States for the short- and long-term treatment of schizophrenia, acute mixed and manic episodes of bipolar I disorder, and maintenance treatment of bipolar disorder. Since Zyprexa was introduced in 1996, it has been prescribed to approximately 20 million people worldwide.

Zyprexa is not approved for the treatment of patients with dementia- related psychosis. Elderly patients with dementia-related psychosis treated with atypical antipsychotic drugs are at an increased risk of death compared with those patients taking a placebo. In addition, compared to elderly patients with dementia-related psychosis taking a placebo, there was a significantly higher incidence of cerebrovascular adverse events in elderly patients with dementia-related psychosis treated with Zyprexa.

Hyperglycemia, in some cases extreme and associated with ketoacidosis or hyperosmolar coma or death, has been reported in patients treated with atypical antipsychotics, including Zyprexa.

As with all antipsychotic medications, a rare and potentially fatal condition known as NMS has been reported with Zyprexa. If signs and symptoms appear, immediate discontinuation is recommended. Clinical manifestations of NMS are hyperpyrexia, muscle rigidity, altered mental status and evidence of autonomic instability (irregular pulse or blood pressure, tachycardia, diaphoresis and cardiac dysrhythmia). Additional signs may include elevated creatinine phosphokinase, myoglobinuria (rhabdomyolysis), and acute renal failure.

Also, as with all antipsychotic treatment, prescribing should be consistent with the need to minimize Tardive Dyskinesia (TD). The risk of developing TD and the likelihood that it will become irreversible are believed to increase as the duration of treatment and the total cumulative dose of antipsychotic increase. The syndrome may remit, partially or completely, if antipsychotic treatment is withdrawn.

The most common treatment-emergent adverse event associated with Zyprexa in placebo-controlled, short-term schizophrenia and bipolar mania trials was somnolence. Other common events were dizziness, weight gain, personality disorder (COSTART term for nonaggressive objectionable behavior), constipation, akathisia, postural hypotension, dry mouth, asthenia, dyspepsia, increased appetite and tremor.

Full prescribing information, including a boxed warning, is available at www.zyprexa.com.

About Eli Lilly and Company

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of first-in-class and best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com.

C-LLY

This press release contains forward-looking statements about Zyprexa(R). These statements reflect management's current beliefs; however, as with any commercial pharmaceutical product there are risks and uncertainties in the process of commercialization and regulatory review. In addition, there are no guarantees that the product will continue to be commercially successful. When final, this settlement is expected to resolve the vast majority of the pending and tolled claims as well as the potential claims of a large number of additional individuals; however, there is no guarantee that the settlement will become final. Also, the settlement does not resolve all pending cases and it is possible that the company could receive a substantial number of new claims in the future from individuals not subject to this settlement. For further discussion of these and other risks and uncertainties, see Lilly's filings with the United States Securities and Exchange Commission. Lilly undertakes no duty to update forward-looking statements.

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SOURCE Eli Lilly and Company

Tarra Ryker, +1-317-276-3787, or Marni Lemons, +1-317-433-8990, or Phil Belt,
+1-317-276-2506, all of Eli Lilly and Company

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