Lilly to shift more employees to Covance

Eli Lilly and Co. expects to shift another 17 employees to New Jersey-based Covance Inc.'s Greenfield Laboratories in an expansion of their 15-month-old partnership, the companies announced Friday.

Covance plans to use the Lilly employees in a new $15 million biotech services center it is building at the Greenfield site. The Lilly employees have been offered jobs at Covance but have the option to find a different job at Lilly.

Biotech drugs, which are made from proteins instead of chemicals, have become increasingly important for Indianapolis-based Lilly and its peer companies. More than half of Lilly’s experimental drugs in human testing are biotech.

Covance acquired the Greenfield Labs from Lilly in October 2008 for $50 million and a 10-year agreement from Lilly to use Covance’s services. At that time, 264 Lilly employees shifted to Covance.

Covance uses the Greenfield Laboratories to conduct early stage tests of experimental drug molecules, readying them for tests in humans. Since acquiring the site from Lilly, Covance has signed on more than 20 other clients, ranging from a two-person drug discovery firm to some of the 10 largest pharmaceutical companies.

Those new clients have helped Covance hire another 70 employees since buying the Greenfield Laboratories. And it has plans to add 315 more positions in the next three years.

“We’re pleased to say it has been a success thus far,” Jon Koch, general manager of the Greenfield Labs said during a presentation at a life sciences conference staged by Indiana University and Barnes & Thornburg LLP.

Lilly officials said that they are considering further expansions of the company’s partnership with Covance, which could involve transferring more employees to Covance.

Lilly is in the midst of trimming 5,500 jobs from its worldwide work force by the end of 2011. The company now has a work force of about 40,000.

The company also is trying to trim $1 billion from its annual operating expenses. So far, Lilly announced, the deal with Covance has put it on pace to save “tens of millions of dollars.”

"We're building a highly productive partnership," said Andy Dahlem, vice president of Lilly's research and development arm.