The construction has been halted because the company expects to be able to meet the growth in insulin demand with already existing manufacturing sites and new insulin capacity that is being built in Italy. Lilly commented that all 120 employees at the site will be given opportunities for jobs at other sites or will be given a severance package.
“As a part of these efforts, Lilly is making several changes to its global manufacturing operations to ensure the company has the right capacity in the right places. This requires investing in new growth areas and reducing resources in others,” said Scott Canute, Lilly's president of manufacturing operations.
As part of the restructure, Lilly also plans to make significant new investments in Kinsale, Ireland, and Indianapolis to manufacture a new generation of biotechnology products. Lilly expects to launch one biotech product per year, on average, beginning in 2010.
Lilly also will offer a “voluntary exit” program for up to 250 employees at its Tippecanoe Laboratories, in response to excess capacity for small molecule active ingredients. This program allows employees to voluntarily leave or retire from the company with an enhanced severance package.
The estimated restructuring and asset impairment charges will be approximately $155 to $185 million. These charges will be split between the fourth quarter of 2006 and the first quarter of 2007.