Lilly is restructuring its global manufacturing operations in an effort to better support its current product portfolio and drug pipeline. “Lilly is continuing to transform its operations to compete and win in a more challenging business environment,” said Scott Canute, Lilly’s president of manufacturing operations. “As a part of these efforts, Lilly is making several changes to its global manufacturing operations to ensure the company has the right capacity in the right places. This requires investing in new growth areas and reducing resources in others.”

As part of this strategy, Lilly has stopped construction on an insulin manufacturing plant in Prince William County, VA. The 120 employees working at the site will be offered jobs at other sites and those who choose not to stay will be given a severance package. According to the company, it is now able to meet growing demand for its insulin products with existing sites and new insulin capacity that is being built in Sesto, Italy. Lilly’s insulin operation for its new pre-filled Humalog MirioPen, which is currently being reviewed by the FDA, will be at the company’s delivery device assembly operations in Indianapolis, rather than the Prince William County site.

In response to excess capacity in Lilly’s small molecule active ingredient operations, 250 of the 1000 employees at its Tippecanoe manufacturing site in Lafayette, IN will be offered a voluntary exit program.

The company will make investments to expand in Kinsale, Ireland, and Indianapolis parenteral operations to manufacture a new generation of biotechnology products. Biotechnology-based programs and drug candidates now make up more than 30% of the company’s portfolio and pipeline, and Lilly expects to launch one biotech product per year, on average, beginning in 2010. Both expansions are part of a $1.5 billion investment in the company’s biotechnology capabilities announced duringthe past five years. These investments include a newly completed biotech pilot manufacturing plant and a biotech research laboratory, both located in Indianapolis.

Mr. Canute noted that these expansions follow the recently completed $1.0 billion expansion of its PR manufacturing operations, which includes new bulk capacity for Humalog, the company’s rapid acting insulin analog.