Thermo takes over trial supply production at Lilly Indy plant

By Gareth Macdonald

- Last updated on GMT

Related tags Pharmacology

Thermo Fisher Scientific will take charge of clinical trial material production at Eli Lilly’s research technology facility in Indianapolis as the pharmaceutical firm further reduces in-house capacity to cut costs.

Under the new deal, Thermo’s clinical services unit will buy Lilly’s in-house manufacturing, packaging and labelling technology, taking charge of both production and, by the end of the year, distribution of trial materials at the facility.

In a press statement, Lilly said that the agreement helps “reduce some of its fixed costs​,” although it did not specify how much it will save.

Also, according to the drugmaker, employees affected by the transition “will have the opportunity to apply for roles at Fisher Clinical Services.” A report in the Indianapolis Business Journal​ suggests that the facility has a staff of 115.

The five-year agreement fits with efforts to reduce spending by $1bn​ (€741m) through workforce and capacity cuts and greater use of third-party contracts which, earlier this month for example, saw Lilly expand its R&D partnership with Covance​.

Prior to this, the Indiana drugmaker announced it had completed the sale​ of its Tippercanoe Labs active pharmaceutical ingredient manufacturing (API) in Lafayette to Germany’s Evonik Industries.

For Thermo, and specifically its clinical services unit, the benefits of the new partnership are potentially two-fold.

Firstly, while it did not release a specific figure, the Massachusetts services firm is likely to generate a substantial amount of income through the deal as Lilly strives to bring more candidate drugs to trial to replenish its pipeline of aging blockbusters.

The second potential benefit is additional production capacity because it is not impossible to imagine that, having already sold the production equipment, Lilly may one day seek a buyer for the facility in the future as it did at Tippercanoe.

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