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Lilly injecting $140M into U.S. insulin pen production

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Eli Lilly ($LLY), one of the big dogs in diabetes treatments, will invest $140 million in a plant on its Indianapolis campus to begin making insulin-filled cartridges for the U.S. market. That work is currently done outside the U.S.

CEO John C. Lechleiter, during a live streamed press conference, termed it one of Lilly's most "significant U.S. based manufacturing investments in decade." 

Maria Crowe, president of manufacturing, said construction on the 80,000 square-foot expansion is expected to be complete in 2014 and the company anticipates the plant will be validated, approved and operational in 2015. She said the work will involve about 350 construction jobs and the plant will be staffed by 100 people when its goes online. Based in Indianapolis, she pointed out the company has had manufacturing operations there during its entire 136-year history and has about 3,000 employees just in manufacturing operations in the city. 

Crowe said other facilities on the Indianapolis campus already make the active ingredient and the injectable pens used for the product, so it makes sense to complete the cycle and make the entire product for the U.S. in the U.S. She said the company will apply for some tax abatements when it is further along.

Diabetes products are expected to be one of the biggest growth areas in pharma in the next decade as the populations here and around the world get older and fatter, and Lilly is expected to be a beneficiary of that growth. The statistics Jefferies analyst Jeffrey Holford shared with clients in June tell the story. He says the best-selling diabetes drugs and markets will have "sustainable high-single-digit growth," reaching about $54 billion annually by 2020 with demographic changes and with healthcare reform that gives patients access to more and better drugs. While Holford predicts that Novo Nordisk, ($NVO) will remain the top diabetes drug player, he said he sees Eli Lilly taking the No. 2 spot from Sanofi ($SNY) by 2017.

Besides its current insulin products, Lilly has a slate of new diabetes products in development that are showing positive results. Just this month Lilly announced data from three Phase III studies of dulaglutide, a once-weekly GLP-1 analog. GLP-1 class drugs boost insulin secretion, helping patients control critical blood sugar levels. Lilly said with the data it expects a 2013 regulatory filing--once it has completed its work laying out the cardiovascular risk presented by the therapy.

- here's the release

Special Report: Top diabetes drug pipelines of 2012

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