Eli Lilly is building a $5 billion manufacturing plant in Virginia
The Eli Lilly Biotechnology Center is shown on March 1, 2023 in San Diego, California.
Mike Blake | Reuters
Eli Lilly On Tuesday, the company said it will spend $5 billion to build a manufacturing facility in Goochland County, Virginia, to increase production capacity for targeted cancer drugs and other treatments, the first in a series 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 facilities, 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 manufacturing drugs at all four facilities within five years.
Drugmakers are scrambling to boost production in the U.S. as President Donald Trump threatens to clamp down on the industry with tariffs on imported drugs. Trump said these levies would encourage companies to move production overseas again after domestic drug manufacturing shrank dramatically over the last decade.
In a news release Tuesday, Eli Lilly said the new Virginia plant will develop anti-cancer and autoimmune drugs, among other advanced treatments. It will be the company’s first dedicated active ingredients and drug product website for its bioconjugate platform and monoclonal antibody drug portfolio.
Eli Lilly said the facility will specifically boost domestic manufacturing of targeted treatments called antibody-drug conjugates – a type of bioconjugate that combines a monoclonal antibody with a toxic “payload” to kill cancer cells. Eli Lilly is among several pharmaceutical companies developing or currently marketing these drugs, which drugmakers are also studying in autoimmune diseases and other diseases.
“This is a new capacity that allows for pipeline growth. We have a number of new assets in place that will use both biologics and these antibody-drug conjugates,” Eli Lilly CEO Dave Ricks said in an interview with CNBC. “This site will be unique in that we will be able to manufacture this type of medication for ourselves – we do not currently have this capacity in the company – and even fill it into the form of a drug product, i.e. the vial, and ship it.”
Ricks said the company will move some production to the new Virginia location from third parties and “other hubs in our network, primarily from Europe.”
Eli Lilly chose the state for the new plant “because of the location, the logistics, the workforce and, frankly, just because the site is operational,” Ricks added. He said construction of the facility for other industrial use had already begun in recent years.
“Now the utilities and all those things are up and running, and we’re in a little bit of a hurry to get those up and running as our pipeline moves forward,” Ricks said.
David Ricks, CEO, Eli Lilly
Scott Mlyn | CNBC
He said that “the main thing about building in America is really about the tax situation” rather than the threat of drug tariffs, adding that “it makes more sense to build in the US than ever before.” Ricks had previously touted Trump’s 2017 Tax Cuts and Jobs Act for pushing the company to increase its U.S. investment in manufacturing.
That law, passed by a Republican-majority Congress during Trump’s first term, was the largest overhaul of the tax code in nearly three decades and, among other things, cut the corporate tax rate to 21%.
Eli Lilly said it will use advanced technologies such as machine learning and artificial intelligence at the site that “enable correct execution the first time, supporting 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 staff and laboratory technicians. In addition, 1,800 construction jobs would be created in the region, the company said.
Eli Lilly’s other U.S. facilities include locations in North Carolina, Indiana and Wisconsin.
The new U.S. investments build on the success of Eli Lilly’s weight-loss drug Zepbound and its diabetes counterpart Mounjaro, which vied with competing treatments for dominance in the booming market for so-called GLP-1 drugs Novo Nordisk. Both companies have poured billions into expanding production capacity for these drugs, which has helped ease the shortage of treatments in the United States
But Eli Lilly’s new investments aren’t just focused on current and future treatments for obesity and diabetes. The company plans its future beyond Zepbound and Mounjaro and hopes to deliver medicines from its wide range of products for cancer, Alzheimer’s and other diseases.
—CNBC’s Angelica Peebles contributed to this report.
