Pharma Selling Operations
Indiana, for example, has grown its segment of CMOs and other third-party service providers to more than 8,000 workers and 40 companies as of last year. Those numbers are expected to increase in coming years, according to the BioCrossroads report.
Since 2008, Eli Lilly has shed about 1,000 jobs by selling off three Indiana plants. Lilly did sign long-term service contracts with their buyers to ensure that it still has access to the expertise and skill of plant employees. Covance bought Lilly’s Greenfield, IN, site for $50 million in 2008 and signed a 10-year deal to assume responsibility for Lilly’s toxicology testing and other R&D support activities there. The Greenfield facility has doubled employment to 500 jobs since the Eli Lilly sell-off.
Lilly’s Tippecanoe Laboratories plant in West Lafayette, IN, is now run by Evonik Industries and refocused on making APIs and specialty chemical and animal health products. Finally, an Indianapolis plant was sold off last year and is now used by Fisher Clinical Services for outsourced clinical trial material management. Fisher Clinical, which expanded into Indiana with the deal, now handles the distribution of clinical trial materials for Lilly throughout North America.
“A lot of the infrastructure was built up around Lilly, and then it has continued to grow a little bit faster,” Brian A. Stemme, project director for BioCrossroads, explained to GEN.
Besides Lilly divesting production plants, another reason why CMOs have grown in Indiana, according to Stemme, is the presence of strong academic research institutions like Purdue University, which has an industrial pharmaceutical program.
The potential for growth has made CMOs attractive to professionals looking to build up biotech clusters without the advantages the nation’s largest bioclusters enjoy, such as a big community of venture capitalists or dozens of universities and independent research institutions.