Lilly to spend $4.5 billion on Indiana center combining drug research and manufacturing

Eli Lilly said on Oct. 2, 2024 that it will spend $4.5 billion on a new Lebanon, Indiana, center called the Lilly Medicine Foundry, designed to develop new ways of making medicines and to produce clinical trial supply at the same location ^[1][2][3]. The company said the foundry is expected to open in late 2027 ^[1][2][3].

The facility is expected to add 400 full-time jobs, including engineers, scientists, operations personnel and lab technicians ^[1][3][4]. Lilly called it the first facility of its kind to combine research and production under one roof ^[2][3]. It will be equipped to make small molecules, biologics and genetic or nucleic acid therapies ^[2][3][4]. It is not intended for full-scale commercial production; Lilly said manufacturing techniques developed there will be transferred to its other sites for large-scale output ^[1][3]. The foundry will be a standalone facility of seven main buildings, and the company said it has not yet decided where on the site it will sit ^[3]. The Indianapolis Business Journal reported the project will expand the Lebanon footprint by about 200 acres, from 600 acres ^[3].

Lilly's obesity pipeline includes 11 drugs with different mechanisms and ways of being taken, CEO David Ricks told CNBC, among them the experimental pill orforglipron and an injectable candidate, retatrutide, both in late-stage studies ^[1][2]. Reuters reported that Lilly has invested billions to increase production of tirzepatide, the active ingredient in Zepbound and Mounjaro, after demand outpaced supply for most of the year ^[1]. The Indianapolis Business Journal reported the company has said the supply crunch has eased and pharmacies are getting much of what they ordered ^[3]. CNBC reported that Mounjaro and Zepbound are expected to bring in $50 billion by 2028, and that some analysts expect the GLP-1 market to reach $150 billion by the early 2030s ^[1][2].

Ricks told CNBC the site could increase the company's output by 400%, according to Reuters ^[1]. The sources describe Lilly's nearby spending differently: CNBC described the foundry as sitting near a $9 billion manufacturing complex Lilly is building in Lebanon to produce ingredients such as tirzepatide ^[2], while the Indianapolis Business Journal said the new $4.5 billion brings Lilly's total investment in the Lebanon site to more than $13 billion ^[3]. Lilly said its total U.S. capital commitment is now over $23 billion since 2020 ^[1].

Indiana's economic development corporation said it would contribute an additional $456 million in tax incentives tied to Lilly's promise to hire 239 Hoosiers by 2030 ^[4]. As of May 2024, the company's total incentive package reached more than $1.25 billion, and Lilly can collect an estimated $1.2 billion in tax rebates over 30 years under its Innovation Development District designation ^[4]. The state also plans road, water and utility improvements for the site ^[3]. Boone County residents raised concerns about farmland and water use, and a lawsuit challenging annexation of land for the district was dismissed; Tippecanoe County residents objected to plans to pipe water from the Wabash River aquifer ^[4]. Governor Eric Holcomb said there was enough water for all current development at the site ^[4].

Why it matters for patients

The foundry is aimed at clinical trial supply, the smaller batches used while drugs are still being tested, not at making the commercial supply of medicines already on the market ^[3]. That means it would not change the supply of Zepbound, Mounjaro or other approved products when it opens; Lilly's separate investment for active pharmaceutical ingredients is a different project ^[1][3]. Specific medicines that will be produced at the foundry have not been disclosed ^[3]. Lilly has said the combined arrangement is meant to move experimental medicines, including obesity drugs, through development faster, but that has not been demonstrated yet, and the facility is not scheduled to open until late 2027 ^[1][2][3].

What happens next

Lilly has set a late-2027 target for the foundry to open ^[1][2][3]. The Indiana Finance Authority is due to release a regional water study in December 2024 to assess water demand and availability in north central Indiana ^[4]. Lilly has not yet said where on the Lebanon site the foundry will be built, and the state incentives are tied to hitting 239 hires by 2030 ^[3][4].