Eli Lilly reported that several strategic changes to its global manufacturing operations are under way to better support the company’s current product portfolio and evolving drug pipeline. “Lilly is making several changes to its global manufacturing operations to ensure the company has the right capacity in the right places,” remarks to Scott Canute, Lilly’s president of manufacturing operations.
There are a number of specific decisions that will affect the company’s manufacturing activities. For example, construction of the planned insulin manufacturing plant in Prince William County, VA, will stop. Canute says that Lilly continues to expect growing worldwide demand for its insulin products and insulin delivery devices, but not at levels projected when plans for the Prince William site were put in place in 2003. The company believes it will be able to meet the demand with existing sites and with a new insulin capacity that is being built in Sesto, Italy.
Other factors impacting this decision are ongoing productivity gains, quality improvements, and investments at existing insulin manufacutring sites.
The company will return all economic development incentives received from state and local entities. The estimated restructuring and asset impairment charges will be approximately $155 to $185 million. These charges will be split between the fourth quarter of 2006 and the first quarter of 2007 and will result in a fourth quarter 2006 earnings per share charge of 5 cents.
All of the 120 employees working at the site who wish to stay with Lilly will be given opportunities for jobs at other company sites, notes a company spokesperson. Those who choose not to stay will be given a severance package.
The assembly operation for Lilly’s new prefilled insulin pen, Humalog® MirioPen™, will be placed at Lilly’s delivery device assembly operations in Indianapolis, rather than the Prince William County site.
In response to excess capacity in Lilly’s small molecule active ingredient operations, a voluntary exit program is being offered for up to 250 employees at Lilly’s manufacturing site in Lafayette, IN. There are about 1,000 employees currently working at the site.
New investments will be made in Kinsale, Ireland, and Indianapolis parenteral operations to manufacture a new generation of biotechnology products, according Canute. Lilly expects to launch one biotech product per year, on average, beginning in 2010.