Lilly doubles down on insulin plant, expands API capacity

Eli Lilly ($LLY) has a slate of insulin products under development that it hopes will rejuvenate its fortunes. But it also gets 15% of its revenues from existing insulin products, which may come under price pressures as biosimilars hit the market. So just 5 months after kicking off construction of a new insulin cartridge plant, the company has decided to more than double its investment in the project and expand its API capacity as it prepares for the future and looks to scratch out lower costs.

Lilly today said it will bump its initial $140 million investment to $320 million and add another 84,000 square feet of space to the new Indianapolis facility it started in November. It initially planned an 80,000-square-foot, single-line plant where it would make insulin and fill cartridges for pens. Now it will have two lines with the first expected to open in 2016 and the second in 2017. Lilly also said it will put about $40 million into expanding capacity at a nearby API plant so it will be able to increase insulin production without having the expense of a new plant. 

This is Lilly's first insulin cartridge plant in the U.S. It has plants that fill pens in Italy and France. Lilly's president of global manufacturing, Maria Crowe, tells the Indianapolis Star that its goal is to use common manufacturing platforms where possible but the Indianapolis plant will employ some new technology not used in the European operations. "We hope it's faster and we get a bit more output from it," she said. 

Besides its current insulin products, Lilly has a slate of four diabetes products in development that are showing positive results. But experts say that price pressures from biosimilars will force companies to find manufacturing efficiencies. Matthew Hudes, U.S. managing principal in biotechnology at Deloitte Consulting, thinks the competitive price pressures that will drive the biosimilars business may very well lead to the first innovations in biologics manufacturing in 15 to 20 years. "This is potentially a disruptive force in the industry, and it presents an opportunity for process innovation," Hudes recently said in an interview. 

- here's the release
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