The Eli Lilly Biotechnology Center is on display in San Diego, California on March 1, 2023.
Mike Blake | Reuters
Eli Lily On Tuesday, he said $5 billion will be spent building a manufacturing facility in Goochland County, Virginia, increasing production capacity for targeted cancer drugs and other treatments.
The company announced in February that it would spend at least $27 billion to build four new domestic manufacturing plants, adding to $23 billion since 2020. EliLilly announced the remaining three sites this year, saying it plans to manufacture the medicines in all four facilities within five years.
Drugmakers are rushing to boost production in the US as President Donald Trump threatens to round out the industry with tariffs on imported drugs. Trump said these taxes encourage businesses to re-land production on the re-shore after a dramatic reduction in domestic drug manufacturing over the past decade.
In a release Tuesday, Eli Lily said the new Virginia plant will develop active ingredients for cancer and autoimmune drugs, along with other advanced treatments. It will be the company’s first dedicated active ingredient and pharmaceutical product site for its biocondensation platform and portfolio of monoclonal antibody drugs.
Eli Lilly said the facility will in particular strengthen domestic production of targeted therapies called antibody drug conjugation. This is a type of bioconjugate that links monoclonal antibodies to toxic “payloads.” Eli Lilly is one of several pharmaceutical companies that are developing or selling these drugs, and drug makers are also studying in autoimmune conditions and other diseases.
“This is a new ability to enable pipeline growth. There will be many new assets that use both biology and these antibody drugs,” Eli Lilly CEO Dave Ricks said in an interview with CNBC. “This site is unique in that we can make such medicines for us. We don’t have that ability to the company at the moment. We also put it in the form of a formulation product and ship it in a vial.”
Rix said the company will move some of its production from third parties and “other nodes primarily from Europe” to the new Virginia site.
“We chose the state for our new factory, for the location, logistics, the labor force and, frankly, for the site we’re ready to go,” added Rix. He said construction for different industrial use began at facilities over the past few years.
“Now, the utilities and all of them are all ready to roll, and our pipeline is ongoing, so we’re in a bit of a hurry to get these up and running,” Rix said.
David Rix, CEO Eli Lilly
Scott Mullin | CNBC
He said, “The main thing about American buildings is not the threat of drug tariffs, but really has to do with the tax situation,” adding that “it makes more sense to build them in the US than ever.” Rix previously promoted Trump’s 2017 tax cuts and employment, urging the company to increase US manufacturing investments.
Passed by a majority Republican Congress during Trump’s first term, the law was the largest tax law overhaul in nearly 30 years, and among other efforts, it reduced the corporate tax rate to 21%.
Eli Lilly said the site will use advanced technologies such as machine learning and artificial intelligence.
The company said the site will bring more than 650 new jobs to Virginia, including engineers, scientists, operations personnel and lab engineers. It also created 1,800 construction jobs in the region, the company said.
Other US plants by Eli Lilly include sites from North Carolina, Indiana and Wisconsin.
The new US investment is built on the success of Elilily’s weight loss pill Zepbound and diabetes counterpart Moonjaro. Novo Nordisk. The companies leaked billions of dollars to increase the production capacity of these drugs.
But Eli Lilly’s new investments aren’t just focused on current and future obesity and diabetes treatments. The company is celebrating the future beyond Zepbound and Mounjaro as it hopes to deliver drugs from a wide range of products pipelines for cancer, Alzheimer’s and other conditions.
– CNBC’s Angelica Peebulls contributed to this report.
