Eli Lilly said today it will invest $400 million toward expanding its manufacturing capabilities at its Lilly Technology Center campus in Indianapolis, an initiative that is expected to add 100 jobs to the pharma giant’s workforce.
The expansion, Lilly said, will include enhancements to existing manufacturing facilities that make insulin, additional capacity for its growing portfolio of diabetes medicines, and initial capital investments for future medicines.
“These investments support our manufacturing capabilities in Indianapolis, including additional capacity and technology upgrades to our active ingredient, syringe filling, device assembly, and packaging operations,” Myles O’Neill, senior vice president and president of manufacturing operations, said in a statement.
Lilly cited growing demand for its treatments in announcing the expansion. The company last month reported a 9% year-over-year increase in third-quarter net income, to $1.254 billion, on revenue that rose 3%, to $5.477 billion.
Lilly’s top-selling drug, the type 2 diabetes blockbuster treatment Trulicity® (dulaglutide), showed a 24% sales jump to $1.012 billion, while breast cancer treatment Verzenio® (abemaciclib), which won FDA approval in 2017, racked up the largest year-over-year gain, growing to $157.2 million in revenue.
Added Lilly chairman and CEO David A. Ricks: “These investments demonstrate Lilly’s commitment to our manufacturing footprint in Indiana and the United States.”
Ricks credited the 2017 Tax Cuts and Jobs Act, signed into law by President Donald Trump, with enabling the latest expansion.
“With more capital available as a result of tax reform, Lilly and other Indiana companies are able to re-invest and expand production here at home,” Ricks said. “This is crucial for us to continue to advance our state’s economy and drive future investment—adding high-tech jobs and facilities that keep Indiana competitive in the global marketplace.”
Ricks’ remarks aren’t the first time he has linked job expansion by Lilly to favorable tax policies from Washington.
Two years ago, when Lilly committed $850 million on capital projects for its facilities across the United States—including research laboratories, manufacturing sites, and general and administrative areas—Ricks promised to spend even more on U.S. facility expansion than the $5 billion it spent in the decade ending in 2017 as a result of one tax-code change.
That change, included within the Tax Cuts and Jobs Act, was a reduction from 35% in the income tax rate of corporations that repatriate profits earned overseas—to 15.5% on cash or cash equivalents, and 8% on other earnings.
Ricks joined company executives and officials from the state of Indiana and the city of Indianapolis in announcing the expansion plans during an event at Lilly’s Indianapolis headquarters.
“For decades, Indianapolis has been known as a hub for innovation, driven in large part by Eli Lilly and Company’s commitment to our community and their global reputation as an industry leader,” Indianapolis Mayor Joe Hogsett stated. “Today’s announcement helps to expand the skilled work force in Indianapolis and reinforce the company’s presence in central Indiana.”
While the officials played up the additional investment and 100 new jobs being created, Lilly’s workforce has shrunk in recent years. In its Form 10-K annual report for 2018, Lilly said it employed a total 38,680 people, of whom 16,705 were based in the United States. Those numbers have slid from 40,655 employees, including 18,420 American-based workers in 2017; and 41,975, including 18,860 U.S. staffers in 2016.
To cut costs, Lilly implemented a voluntary early retirement program in the United States during 2017, accounting for most of the $1.67 billion in asset impairment, restructuring, and other special charges the company incurred that year.