Advertise With UsAdvertise on our extensive network of industry websites and newsletters.
Get the PBR newsletterSign up to our free email to get all the latest PBR
news.Tippecanoe, to remain in operation with a focus on producing high-quality API and specialty chemical and animal health products
Subscribe to our email newsletter
Eli Lilly has reported the sale of Tippecanoe Laboratories (Tippecanoe) manufacturing facility to Evonik Industries (Evonik). Reportedly, the manufacturing site, located in Lafayette, Indiana, will remain in operation with a focus on producing high-quality active pharmaceutical ingredients (API) and specialty chemical and animal health products.
In connection with the sale of the site, the two companies are also expected to enter into a nine-year supply and services agreement, whereby Evonik will manufacture final and intermediate step API for certain Lilly human and animal health products.
The decision to sell the site is based upon a projected decline in utilisation of the site due to several factors, including upcoming patent expirations on certain medicines made at the site, Lilly’s strategic decision to purchase, rather than manufacture, many late-stage chemical intermediates, and the evolution of the Lilly pipeline toward more biotechnology medicines.
The deal also ensures continuous supply of API to Lilly through a multi-year partnership. Through this arrangement, Evonik will manufacture final bulk and intermediate-step API for human and animal health products and also provide environmental services for Lilly.
Moreover, subject to certain closing conditions, the companies plan for the transaction to close by the end of 2009. Upon closing, Evonik will assume control of the Tippecanoe site and its operations.
The company has claimed that as a result of the transaction, Lilly will record a $.23 per share charge in the third quarter of 2009 related to asset impairments and restructuring.
John Lechleiter, chairman and CEO at Eli Lilly, said: “Today’s announcement represents a positive outcome for employees at the site, the Lafayette community and Lilly. We are confident in our decision to sell Tippe Labs to Evonik that will continue to operate the site and more fully utilize its capabilities.
“These actions also support Lilly’s goal to reduce our workforce and cost structure over time. At Lilly, we are taking the steps necessary to ensure our long-term success by becoming a leaner, more focused, more customer-oriented and more competitive company.”