Closing Lilly plant will cost millions

DRUGMAKER Eli Lilly and Co said yesterday it would take $85 million (€65m) to $95m in restructuring charges for closing a manufacturing facility in Basingstoke, Britain, affecting more than 550 jobs.

The manufacturing site has 445 employees and 111 contractors.

Lilly said that about 100 employees would be retiring, some staff might be redeployed and other employees would take a redundancy package.

The charges would occur primarily in the fourth quarter, the company said in a filing with the US Securities and Exchange Commission.

It said operations would decrease next year, with manufacturing expected to stop at the end of 2007.

Lilly said it was responding to a “more challenging” pharmaceuticals industry and overcapacity in its manufacturing network for medicines in tablet and capsule form. It was developing more “parenteral” products, which were usually introduced to the body through injections and required a different manufacturing technology.

The drugmaker’s British headquarters remain in Basingstoke and the company has a research facility in Surrey and a biotechnology manufacturing facility on Merseyside.

Meanwhile, in Eli Lilly’s Cork division, business leader of public affairs Donal Johnson said there would be no effects from the British fallout.

He said the Cork operation catered for the global markets and now with the biotech expansion, it was on a different mission to the Basingstoke operation.