Eli Lilly to invest $3B in Wisconsin plant expansion

On Thursday, Eli Lilly (NYSE:LLY ) announced a substantial $3 billion investment to expand its recently acquired manufacturing facility in Pleasant Prairie, Wisconsin. The expansion aims to increase production capacities for its in-demand weight-loss drug, Zepbound, as well as diabetes treatments and other medications.

The pharmaceutical giant purchased the plant from Nexus Pharmaceuticals earlier this year and now seeks to enhance its manufacturing capabilities in response to the high demand for these drugs. The investment marks the company's most significant manufacturing commitment outside its home base in Indiana and is expected to significantly augment its production for both current and future medical products.

Edgardo Hernandez, Lilly's president of global manufacturing, emphasized the strategic importance of the investment, stating, "Today's announcement represents our single largest U.S. manufacturing investment outside our home state of Indiana and will add to our ability to expand capacity to make both our existing and future pipeline of medicines."

The shortage of tirzepatide, the chemical name for Zepbound and Lilly's diabetes drug Mounjaro, has been a challenge in the U.S. market. Although the FDA had removed tirzepatide from its shortage list earlier in the year, a lawsuit from an industry group has prompted a reconsideration of this decision. Since its introduction in late 2023, Zepbound has seen over 5.2 million prescriptions, underscoring the need for increased production.

Lilly's investment in manufacturing facilities has been robust, with more than $23 billion committed since 2020. The Wisconsin site's total planned investment now stands at $4 billion, including the cost of the plant acquisition, land, and an adjacent warehouse.

With a market valuation exceeding $790 billion, Lilly is now the world's most valuable healthcare company. The construction of the expanded facility is slated to begin next year, with production anticipated to start by the end of 2025. The expansion is expected to create 750 new jobs, adding to the current workforce of over 100 at the Wisconsin plant.

This move mirrors industry trends, as competitors like Novo Nordisk (NYSE:NVO ) also invest heavily in manufacturing to meet the demand for their weight-loss medications. Earlier this year, Novo Nordisk acquired three sites from Catalent (NYSE:CTLT ) for $11 billion to boost the supply of its weight-loss drug Wegovy.

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Source: Investing.com