Lilly offloads 700-worker Indiana plant

The folks in Lafayette, IN, are hailing drugmaker Eli Lilly right now. Rather than closing a manufacturing plant there as planned, the drugmaker found a buyer, saving some 700 jobs. "We're very, very excited and pleased with this," John Lechleiter (photo [1]), Lilly's chairman and CEO, told the Indianapolis Star. "I think for the people at the site, for the community of Lafayette, and for our companies, this represents a very good outcome."

German chemical company Evonik Industries agreed to the acquisition and plans to offer jobs to current staff at the plant, which makes APIs and specialty chemicals. Under the deal, Evonik will supply Lilly with some ingredients for human and animal products. The plant has made APIs for several of Lilly's signature meds, including the Prozac antidepressant and cancer treatment Gemzar.

In selling the plant, Lilly is effectively outsourcing that API business, allowing it to focus more of its attention on the tough pharma road ahead. As the IndyStar points out, that's remarkably similar to last year's sale of a New Jersey drug-development center to Covance [2], which kept Lilly's employees and inked a long-term supply deal with the company. And the Lafayette plant sale takes those 700 employees off Lilly's payroll--good news for employees awaiting news about the pending 5,500 layoffs. Only 4,800 left to go.

- see the Lilly release [3]
- read the IndyStar piece [4]
- get more [5] from Reuters

Related Articles:
Eli Lilly to outsource half of research by 2010 [6]
Covance inks $1.6B deal with Lilly [2]
Lilly inks data management deal with Icon [7]
Lilly opens a portal to new drug collaborations [8]