Eli Lilly and Novast Laboratories said today they will expand their manufacturing and development capabilities in Nantong, China, as part of a partnership the companies signed two years ago to develop a line of Lilly-branded generic drugs.

Lilly will spend $60 million to $70 million to build a new 260,000-square-foot manufacturing plant within a 22-acre campus in the Free Trade Zone of the Nantong Economic Technology Development Area (NETDA). The plant will employ 350 and be designed to enable production of both sustained release and containment solid oral dosage prescription drugs, with an annual additional capacity of more than 2.2 billion units.

“In Lilly’s emerging markets business, we are focused on providing patients with innovative medicines from our own pipeline, as well as select Lilly-branded generic medicines that meet Lilly global quality standards. The additional manufacturing capabilities provided by Novast will allow us to better deliver on that strategy,” Alfonso Zulueta, Lilly’s svp and president of emerging markets, said in a statement.

Construction on the plant is expected to finish by the end of 2015.

According to Novast’s website, the expanded plant will add “the ability to manufacture to manufacture pellets and oncology containment solid dosage forms as well as increase the capacity of the hormonal product manufacturing.”

“Novast currently manufactures its approved products in two independent facilities on a single campus with one dedicated facility manufacturing exclusively oral contraceptive and hormonal products and the other for conventional dosage form products,” the company said, adding that its manufacturing capacity now approaches 3 billion units.

According to its website, Novast operates the Greenfield cGMP commercial manufacturing plant completed in 2007. The company has manufacturing and business office facilities located in Nantong and a business office located in Irving, Texas near the Dallas-Fort Worth (DFW) Airport.

Lilly and Novast signed a strategic partnership focused on generics in 2012, with the pharma giant agreeing to invest $20 million in the Chinese company toward a facility for manufacturing Lilly products. Lilly made its first investment in Novast years earlier through its Lilly Asian Ventures.

Also that year, Lilly CEO John Lechleiter said the pharma giant would look to double its sales in China, following a 31% spike in 2011

In its Form 10-K for last year, filed Feb. 19, Lilly predicted that “strong revenue growth is expected in China” this year, without quantifying that projected growth.

“This day marks a new chapter for Novast as we are transitioning from commercializing quality prescription products in the United States to focusing on catering the same to the China domestic needs through the collaboration platform with Lilly,” Guohua Zhang, Ph.D., Novast’s president and CEO, said in a statement.

The Novast announcement came on the same day manufacturing issues involving one of Lilly’s partners, Boehringer Ingelheim, were cited by both companies in their announcement that FDA held off approving their adult type 2 diabetes compound empagliflozin. They said FDEA instead issued a complete response letter that cited “previously observed deficiencies” at the Boehringer site where the sodium glucose co-transporter-2 (SGLT2) inhibitor was set to be produced, adding: “Boehringer Ingelheim and Lilly are committed to working with the FDA.”

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