Lilly to invest in Indy, cut Lafayette work force

Eli Lilly and Co. said today it will invest “significant resources” in biotechnology manufacturing in Indianapolis and offer voluntary buyouts to 250 workers in Lafayette as part of a shake-up of global manufacturing operations.

The Indianapolis drug maker said it will expand Indianapolis operations in order to turn active ingredients made at an expanded site in Kinsale, Ireland, into final doses. Both projects are included in the $1.5 billion push into biotechnology Lilly has been implementing over five years.

Lilly said it anticipates rolling out an average of one biotech product a year beginning in 2010.

The job cuts at the Tippecanoe Laboratories site in Lafayette is the result of too much capacity in production of small molecules. The site employs about 1,000.

Lilly also said it will immediately stop construction on an insulin manufacturing plant in Prince William County, Va., because demand hasn’t been as high as projected. The anticipated increase in demand can be met at a plant under construction in Sesto, Italy.

Lilly said the 120 Virginia workers will be allowed to stay with the company or take a severance package, and that economic development incentives will be returned.

 

A charge of $155 million to $185 million will be split between the fourth quarter of 2006 and first quarter of 2007. The fourth-quarter charge will amount to 5 cents per share in earnings.