Covance, Lilly Sign Strategic Pact

Covance has signed a definitive agreement with Lilly to help transform Lilly’s R&D model. Under the agreement, Covance will acquire Lilly’s 450-acre early drug development campus in Greenfield, IN for $50 million and will offer employment to about 260 Lilly employees.  In addition, Covance will provide Lilly with a broad-range of drug development services during the next 10 years for a contract value of $1.6 billion. Covance will assume ownership of the site and operations in October.
 
Lilly will transfer responsibility to Covance for its non-GLP toxicology, in vivo pharmacology, quality control laboratory, and imaging services.  In addition, the contract includes a committed level of clinical pharmacology, central laboratory, GLP toxicology studies, and clinical Phase II-IV services.

“This announcement represents an innovative approach to the R&D productivity challenges our pharmaceutical clients are facing,” said Joe Herring, Covance’s chairman and chief executive officer. “We are very excited to welcome world-class Lilly scientific talent to Covance, and to take possession of valuable state-of-the-art assets, including more than 600,000 sq. ft. of laboratory space, and acquire new service lines that will help us accelerate our long-term, strategic growth plans. Covance will invest in this facility and maximize its capacity utilization by conducting substantial work with Lilly and bring in new work from other pharmaceutical and biotechnology clients. We expect the Greenfield site to be a key contributor to the future growth and success of Covance.”

“This strategic agreement is a result of a long-term trust-based relationship between our two companies.  Covance has proven they can help accelerate drug development timelines and improve efficiencies with Lilly, which will enable us to further focus on our core competencies in delivering better patient outcomes over the longer-term,” said John Lechleiter, chief executive officer of Lilly. “This industry-pioneering alliance will provide Lilly access to Covance’s broad and efficient drug development platforms. In addition, this collaboration will help us make our fixed cost infrastructure more flexible and continue to grow our portfolio of best-in-class and first-in-class pharmaceutical products.”

Covance has been in Indiana for more than 20 years with a global central laboratory facility in Indianapolis and a Phase I clinic in Evansville. The company has more than 1,000 employees based in that state.