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October 23, 2017

Lilly Plans $72M Upgrade of Insulin Production Facility

  • Eli Lilly said today it will spend $72 million to help deliver on its promised expansion of insulin manufacturing in the U.S.—more than a month after the company unveiled a restructuring plan that will eliminate 8% of its workforce, approximately 3500 jobs.

    Lilly said it will replace an existing insulin vial-filling line and upgrading the technology at one of its Indianapolis insulin production facilities.

    “Our company is poised for continued growth, and diabetes represents one of our key therapeutic areas. Investments such as this are vital to ensuring we continue meeting the needs of people who use our medicines,” David A. Ricks, Lilly's chairman and CEO, said in a statement. “It reinforces our ongoing commitment to the U.S. market and in Indianapolis specifically.”

    Diabetes is one of Lilly’s core therapeutic areas, along with immunology, oncology, neurodegeneration, and pain. Lilly’s top-selling drug is the first insulin analog Humalog® (insulin lispro injection [rDNA origin]), which generated $1.387 billion in revenue during the first half of 2017 (up 6% from a year earlier) and $2.769 billion for all of 2016 (down 3% from 2015).


    Ricks said the project was part of the $850 million in capital projects across the U.S. announced by Lilly on March 24. While the insulin manufacturing tech upgrades disclosed today were not specifically mentioned in that earlier announcement, Lilly did at the time promise to expand its manufacturing footprint in Indianapolis—part of its nine-decade legacy of researching and producing insulin—and make a “significant investment in manufacturing diabetes medicines.”

    Lilly also revealed plans for another diabetes-focused manufacturing expansion project, an $85 million expansion of its Trulicity® (dulaglutide) device assembly operations in Indianapolis, and officially dedicated a $140 million insulin cartridge production facility. 

    Trulicity generated $853.1 million in revenues during the first half of 2017 (up 147% from January–June 2016), and $925.5 million in 2016 revenues (more than triple the $248.7 million recorded for 2015).

    Since 2012, Lilly said, it has invested more than $1.2 to grow its U.S. diabetes product manufacturing operations—part of the $5 billion the company added that it has invested in all U.S. facilities over the last decade.

  • Promising More Investment

    As in March, Lilly is promising to spend even more if President Donald Trump and Congress agree to tax-code changes that promote business activity and thus benefit companies like Lilly.

    On September 27, Trump joined Congressional leaders in unveiling the outline of a tax overhaul plan. “Unified Framework for Fixing Our Broken Tax Code” proposes reducing the corporate tax rate from 35% to 20% among provisions designed to stimulate business activity.

    The tax cut and many other provisions, such as maintaining R&D tax credits, are among proposed changes that Ricks added “would go a long way toward leveling the playing field for American workers and businesses competing against their foreign peers.”

    Trump today urged Congress to approve the plan by year’s end, though the measure faces uncertain prospects for passage.

    On September 7, Lilly blamed patent expirations for its announcement of a restructuring that included elimination of about 3500 jobs. Lilly said most of those jobs would be eliminated through a voluntary early retirement program in the U.S., though the company also announced plans to shut down facilities in Shanghai and Bridgewater, NJ.

    The restructuring, Lilly said at the time, would benefit the company by cutting costs and further focusing its efforts on developing new treatments.

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