Eli Lilly to inject $5.3bn to expand  weight loss drugs factory in US

Investment aims to boost output of Lilly's weight loss drug Zepbound and blockbuster diabetes medication Mounjaro

Chief executive David Ricks said Eli Lilly will expand a site in Indiana that makes tirzepatide, the active ingredient in Zepbound for weight loss, and diabetes drug Mounjaro. Picture: Darragh McSweeney/Provision

Eli Lilly will spend $5.3bn (€4.9bn) to boost production of a key ingredient in its weight-loss and diabetes shots after the treatments’ explosive popularity led to shortages.

The manufacturing investment, which adds to existing plans and is the largest in the company’s almost 150-year history, will expand a site in Indiana that makes tirzepatide, the active ingredient in Zepbound for weight loss and the diabetes blockbuster Mounjaro. 

Lilly chief executive Dave Ricks described the plans to Indiana governor Eric Holcomb at the Indiana Global Economic Summit in Indianapolis.

Lilly’s project is the latest high-profile drug firm bringing more of their processes back to the US. 

That push, which also aims to curtail what the US sees as China’s outsized influence in key sectors, is core to US president Joe Biden’s economy-focused bid for reelection. 

At the same time, Lilly has been locked in a battle with Danish rival Novo Nordisk to dominate the market for weight-loss drugs, which Bloomberg Intelligence analysts estimate could surpass $80bn by 2030. 

Surging demand for the treatments have made both companies some of the most valuable in the world and, despite pouring billions of dollars into boosting output, they’re struggling to keep up.

Patients and pharmacies have consistently complained about the difficulties in getting the medicine. Lilly’s supply bottlenecks have been linked to the complexity of making the plastic pens used to inject the drugs. But if demand continues to be strong, making enough of the active ingredient for the drugs could be a problem too. 

The latest spending adds to the roughly $3.7bn Lilly has already earmarked for the site in Indiana — about 27 miles northwest of its Indianapolis headquarters.

Lilly’s investment comes amid escalating Congressional scrutiny of Chinese companies that manufacture ingredients for US pharmaceutical companies. 

“You’re talking about not just that facility, and what they’ll manufacture there, but the whole supply chain that then forms up around them,” Holcomb said. 

Lilly is entitled to more than $1bn in state tax rebates and training grants tied to the facility, according to a statement from his office.

Lilly’s shares are up by almost 40% since the year began. 

• Bloomberg