Future of Lilly's Lafayette API facility in doubt

By Nick Taylor

- Last updated on GMT

Related tags: Lilly, Eli lilly, Eli lilly and company

The future of Eli Lilly's API manufacturing facility in Lafayette, Indiana has been thrown into doubt by the news the company is considering selling it.

Various media reports claim Lilly informed workers at Lafayette that the facility no longer fits with its manufacturing needs and that a decision will be made on its future in the next six to 12 months.

The workforce has been trimmed by over a third in the past few years, with the plant now operating below maximum capacity according to Lilly.

Lafayette, which began manufacturing in 1954, has fallen victim to the shifting trends in drug production that has left its machinery unsuitable for many products in Lilly’s pipeline.

The site has produced the APIs for a host of Lilly’s blockbusters, including Prozac (fluoxetine), Cialis (tadalafil) and Gemzar (gemcitabine).

However, with Gemzar, which generated $440m in sales in the second quarter of 2008, coming off patent in 2013 and an increased reliance upon biologics in its pipeline Lilly has decided it is time to consider the future of the plant.

This does not necessarily mean the sale or closure of the plant, with Lilly saying running the plant at a lower capacity is a possibility. Information regarding whether the employees will be relocated or offered severance packages is not currently available.

The fate of Lilly’s facilities in Indianapolis could be viewed as a microcosm of the pharmaceutical industry, with Lafayette’s uncertain future contrasting with the $1bn biotech R&D facility that has recently been built.

Reflecting the industry’s shift towards biologics the R&D facility is to focus on the development of biopharmaceuticals for the treatment of major health problems such as diabetes, cancer and Alzheimer’s.

Although Lilly is maintaining a large presence in its home state of Indianapolis the sale of the Lafayette facility would be a blow for the community, which has been entwined with the company since Eli Lilly began working in a drugstore in the town.

Lilly’s operation in Lafayette is said to generate $3m in taxes, with the facility being valued at $170m, according to research in 2006 by Tippecanoe County auditor Jennifer Weston.

The company recorded an operating income of $1,174m for the second quarter of 2008, up from $925m in 2007.

Related topics: Regulatory & Safety

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