Eli Lilly Biotechnology Center is shown in San Diego, California, March 1, 2023.
Mike Blake | Reuters
Eli Lilly on Tuesday said it will spend $5 billion to build a manufacturing facility in Goochland County, Virginia, to boost production capacity for targeted cancer drugs and other treatments — the first in a string of new planned U.S. investments by the drugmaker.
The company announced in February that it would spend at least $27 billion to build four new domestic manufacturing plants, adding to $23 billion in previous investments since 2020. Eli Lilly said it will announce the three remaining U.S. sites this year and expects to begin making medicines at all four facilities within five years.
Drugmakers have been scrambling to boost their production in the U.S. as President Donald Trump threatens to clamp down on the industry with tariffs on imported pharmaceuticals. Trump has said those levies will encourage companies to re-shore production after domestic drug manufacturing shrank dramatically over the past decade.
In a release Tuesday, Eli Lilly 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 drug product site for its bioconjugate platform and portfolio of monoclonal antibody drugs.
Eli Lilly said the facility will particularly boost domestic manufacturing of targeted treatments called antibody drug conjugates — a type of bioconjugate that links a monoclonal antibody to a toxic “payload” to kill cancer cells. Eli Lilly is among several pharmaceutical companies developing or currently marketing those drugs, which drugmakers are also studying in autoimmune conditions and other diseases.
“This is new capacity to allow for pipeline growth. We’ve got a number of new assets coming that will use both biologics but also these antibody drug conjugates,” Eli Lilly CEO Dave Ricks said in an interview with CNBC. “This site will be unique in that we’ll be able to make that kind of medicine for us — we don’t currently have that capacity in the company — and even put it in the drug product form, so into the vial and ship it.”
Ricks said the company will move some production from third parties and “other nodes in our network, mostly from Europe,” to the new Virginia site.
Eli Lilly chose the state for the new plant “because of the location, logistics, the workforce, and frankly, just a site that’s ready to go,” Ricks added. He said the construction had begun on the facility in previous years for a different industrial use.
“Now, utilities and all those things are all ready to roll, and we’re in a bit of a hurry to get these up and running as our pipeline is advancing,” Ricks said.
David Ricks, CEO, Eli Lilly
Scott Mlyn | CNBC
He said “the main thing about building in America was really related to the tax situation” rather than the threat of pharmaceutical tariffs, adding that “it makes more sense to build in the U.S. than ever before.” Ricks previously touted Trump’s 2017 Tax Cuts and Jobs Act for pushing the company to increase its U.S. manufacturing investments.
That legislation, passed by a majority-Republican Congress during Trump’s first term, was the largest tax code overhaul in nearly three decades and cut the corporate tax rate to 21%, among other efforts.
Eli Lilly said it will use advanced technologies such as machine learning and artificial intelligence at the site, which will “enable right-first-time execution, all in support of the safe and reliable supply of medicines.”
The company said the site will bring more than 650 new jobs to Virginia, including engineers, scientists, operations personnel and lab technicians. It will also create 1,800 construction jobs in the region, the company said.
Eli Lilly’s other U.S. plants include sites in North Carolina, Indiana and Wisconsin.
The new U.S. investments build on the success of Eli Lilly’s weight loss drug Zepbound and diabetes counterpart Mounjaro, which have vied for dominance of the booming market for so-called GLP-1 drugs with rival treatments from Novo Nordisk. Both companies have funneled billions into boosting manufacturing capacity for those drugs, which has helped alleviate shortages of the treatments in the U.S.
But Eli Lilly’s new investments aren’t solely dedicated to current and future obesity and diabetes treatments. The company is charting its future beyond Zepbound and Mounjaro, with hopes to deliver drugs from its broad pipeline of products for cancer, Alzheimer’s disease and other conditions.
— CNBC’s Angelica Peebles contributed to this report.
