Patent Expirations Encourage Lilly To Streamline Manufacturing Activities

Eli Lilly has decided to close its Guayama, Puerto Rico manufacturing site by the end of 2015 due to the impact of patent expirations. Paul Ahern, Ph.D., SVP of Global Active Pharmaceutical Ingredient and Dry Products Manufacturing at Lilly, stated the company evaluated its pipeline and concluded that, due to patent expirations, competition would grow for those medicines and reduce Lilly’s sales. He added that Lilly intends to focus on long-term manufacturing capacity for insulin, biologics, and small molecules.

Lilly’s Puerto Rican Operations

The Guayama closure, announced in a press release, will affect 100 workers who will be offered employment at another Lilly site approximately 50 miles away in Carolina, Puerto Rico. Lilly intends to stop production in 2015 and offer the facility up for sale.

Maria Crowe, president for Lilly's Global Manufacturing Operations, said, "For nearly 50 years, Puerto Rico has served as a major manufacturing location for Lilly, and it will remain so in the future.”

Lilly has been manufacturing products in Puerto Rico since 1965 and currently employs 1,600 people. The company has two manufacturing sites in Carolina, one an insulin active ingredient manufacturing plant and another for oral solid dosage manufacturing. Lilly has recently pledged $240 million to increase capacity at its Carolina plants.

Lilly’s Product Line

In Lilly’s announcement on the Guyama closure, the company stated that it intends to focus on treatments utilizing insulin, biologics, and small molecules. The company currently deploys treatments for cardiovascular conditions, diabetes, endocrine disorders, men’s health, neuroscience, and oncology.

In July 2014, the Wall Street Journal reported that Lilly’s second-quarter profits dropped 39 percent due to patent expirations from Cymbalta, an anti-depressant, and Evista, an osteoporosis treatment. Sales of Cymbalta fell 73 percent and Evista sales fell 61 percent in that quarter. CEO John C. Lechleiter said, "Lilly's second-quarter results reflect a substantial decline in revenue and earnings resulting from recent patent expirations. At the same time, new product approvals and impending launches give us great confidence that Lilly is poised for growth in the years ahead."

Lilly publishes its clinical pipeline, stating that it has 56 molecules in development, including two under regulatory review at the Food and Drug Administration (FDA): dulaglutide and glargine for diabetes. The company also has phase 3 trials undergoing to investigate treatments for pain, arthritis, and Alzheimer’s, among other diseases.