ELI LILLY CANCELS PLANNED INSULIN PLANT CONSTRUCTION

U.S. drugmaker Eli Lilly announced it is stopping construction of an insulin manufacturing plant in Virginia because demand is not as high as the company thought when it planned the facility in 2003.

The company said it will offer the 120 employees working at the site the choice of a job opportunity at another company site or a severance package. It is also trying to get up to 250 employees of the 1,000 at a manufacturing site in Lafayette, Ind., to voluntarily quit or retire early.

The company said it will return all economic development incentives received from state and local entities. Eli Lilly said the Indiana cutbacks are due to "excess capacity" in its small-molecule active ingredient operations. The moves will cost the company $155 million to $185 million in restructuring and asset impairment charges.

"Both of these decisions, along with the previously announced decision to close our manufacturing site in Basingstoke in the United Kingdom, are based on current capacity needs and an assessment of the future mix of products in our portfolio," Scott Canute, president of manufacturing operations, said.

On the other hand, Eli Lilly said it will make "significant new investments" in its facility in Kinsale, Ireland, and in its Indianapolis, Ind., operations to manufacture a new generation of biotechnology products. In the latter location, the company recently completed a biotech pilot manufacturing plant that will manufacture the company's new pre-filled insulin pen, Humalog MirioPen, which is currently under review by the FDA and is expected to become available in the U.S. later this year.