Eli Lilly confirms UK plant closure

By Anna Lewcock

- Last updated on GMT

Related tags Eli lilly Eli lilly and company

Giant drug maker Eli Lilly has confirmed that it will be closing
its manufacturing facility in Basingstoke, England, resulting in
$85m to $95m in restructuring costs for the company.

The move comes as the company aims to cut development costs from $1.1bn (€876m) per drug down to $800m.

The firm claims it is responding to a "more challenging" environment within the pharmaceuticals industry, whereby demand for the plant's main products (medicines in tablet and capsule form) has fallen in the face of the increasing importance of injectable medicines.

While initial plans were to sell off the Basingstoke plant, this did not prove a viable option for the company and the decision to close will impact upon the 500 plus employees and contractors working at the site.

The site produced 56 million packs of finished product per year with an annual volume of 1.5bn doses. The facility was responsible for the manufacture of four of Eli Lilly's key drugs - Cialis (tadalafil), Evista (raloxifene hydrochloride), Strattera (atomoxetine) and blockbuster antipsychotic, Zyprexa (olanzapine).

Manufacture of the drugs that the Basingstoke plant was responsible for will now be resourced from Eli Lilly's facilities in Puerto Rico and Alcobendas, Spain.

Plans for the Basingstoke closure were first announced in June 2006, but manufacturing at the plant will continue until April 2008 when the plant will close finally and it is hoped the land will be sold.

Approximately 100 employees will be eligible for retirement by the time the site closes, and while the company is considering the possibility of redeploying some staff elsewhere, those who do not move will face redundancy along with over 100 contractors currently working at the site who will also lose their jobs.

Eli Lilly will still retain its UK presence with a research facility in Surrey and biotechnology manufacturing facility on Merseyside, as well as its headquarters in Basingstoke.

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