Lilly's Elanco to unload former Novartis vax plant

It has been a rough ride for the former Novartis, former Chiron vaccine plant in Vacaville, CA. Eli Lilly ($LLY) picked it up last year as part of its deal to buy Novartis' animal health assets but has decided it does not need the biologics API facility and so is putting it up for sale.

Real estate brokers CBRE put the word out recently that Lilly had hired it to sell the 78,198-square-foot (7,265-square-meter) facility and a spokeswoman for Lilly's animal health division Elanco confirmed the plan.

"As part of Elanco's acquisition of Novartis Animal Health, Elanco obtained a manufacturing facility in Vacaville, CA," Colleen Parr Dekker said in an email. "Due to Elanco's existing production capacity and comprehensive manufacturing network, Elanco plans to close the facility by Q2 2015."

Novartis ($NVS) got the plant, along with one in Emeryville, CA, when it bought vaccinemaker Chiron in 2006 for $7.5 billion. In 2013, Novartis disclosed in an SEC filing that Novartis Vaccines and Diagnostics had gotten a subpoena from the Justice Department for a "civil and criminal" investigation related to the quality of antigens made at the facilities. Nothing more public ever materialized from that.

Novartis then decided to turn the Vacaville site into an animal health operation, but didn't get that done before deciding last year to sell most of its vaccines operations to GlaxoSmithKline ($GSK) and its animal health unit to Lilly. In July of last year, the company put out a WARN notice that it would lay off the 57 people working at the facility ahead of closing that deal.

CBRE says the facility is one of the largest bulk API manufacturing facilities for recombinant microbial-based biopharmaceuticals in the U.S. It sits on a 52-acre campus, with 28 acres available for future expansion. The 78,198-square-foot (7,265-square-meter) facility includes a downstream processing building, laboratories and a maintenance shop. It also includes 1 MW solar panel array that provides low-cost electric power to the facility.

It is not the only plant that is tied to the Novartis deals to go. In January, Novartis said it would close a plant in Humacao, Puerto Rico that made both veterinary and consumer products. It will close the plant in four phases concluding in early 2019 and axing 270 jobs along the way. It is also the second med vet plant in a week to get the heave-ho. Bayer Healthcare announced last close an animal health operation in St. Joseph, MO and lay off 130 workers after it was unable to sell the facility.

- here's the CBRE release
- here's the SEC filing
- and here's the WARN notice

Special Report: Pharma's top 10 M&A deals of 2014 - Lilly/Novartis Animal Health

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