Eli Lilly (LLY.US) will invest another $3 billion to expand its manufacturing base in the United States to increase production of its blockbuster diabetes and weight loss drugs. The latest investment, the largest outside the company's home state of Indiana, will expand a new manufacturing facility in Wisconsin that is expected to begin next year, according to a statement Thursday. The move will help meet growing demand for injectable drugs like Mounjaro and Zepbound.
"Zepbound and Mounjaro will be the first products produced at this facility," Eli Lilly CEO Dave Ricks said in an interview. "We need to make more products and this is a great place to make them."
Eli Lilly's plan will bring its total investment in Wisconsin to $4 billion, in addition to the $23 billion the company has committed to investing globally since 2020 to build, expand and acquire manufacturing facilities. At the same time, companies, especially those involved in sensitive industries like health care, are moving more of their operations back to the United States.
The company's success with weight-loss and diabetes drugs has made it the world's most valuable pharmaceutical company. Obesity treatment Zepbound and diabetes drug Mounjaro are in high demand, and Lilly wants to establish reliable supply channels.
The company has just emerged from a months-long shortage of the drug due to the complex production process of its auto-injectors. The Wisconsin facility, located in Kenosha County between Chicago and Milwaukee, will also assist with the assembly and packaging of the equipment.
The expanded facility will add 750 highly skilled jobs to the site, including operators, technicians, engineers and scientists. A further 2,000 jobs will be created during construction, the statement said.
“Southeast Wisconsin has grown tremendously over the past year as major companies announced significant investments in our state,” said Wisconsin Governor Tony Evers, who has worked to establish Wisconsin as a leader in life sciences.
Eli Lilly's plant was previously owned by Nexus Pharmaceuticals, which agreed to build the $100 million facility in 2019. At that time, the Wisconsin Economic Development Corporation agreed to provide $1.5 million in performance-based tax credits to assist the company.
It's unclear whether Lilly will receive additional incentives. The agency said it could not comment on any discussions with the company about government incentives before a contract is signed.
Eli Lilly and other drug companies are trying to move more operations back to the United States to shorten and strengthen supply chains. Drugmakers also face an increasing U.S. government crackdown on Chinese biotech companies and consolidation among contract manufacturers.
In February, Eli Lilly's rival Novo Nordisk spent $11 billion to acquire three factories from Catalent Inc., one of the largest contract manufacturers of injectable drugs in the United States.