ShangPharma opens new plant to meet Lilly's R&D needs

By Natalie Morrison

- Last updated on GMT

Related tags: Contract research organization, Pharmacology

ShangPharma opens new plant to meet Lilly's R&D needs
ShangPharma has revealed its newly opened 100,000 sq foot facility will serve the growing capacity needs of pharma giant Eli Lilly.

In November​, Outsourcing-Pharma broke the news that the China-based contract research organisation (CRO) would use the plant for an un-named major customer’s operations as part of its plans to strengthen relations to its top clients.

After this month opening the facility – which includes laboratory and office space – the firm announced it would be dedicated to supporting Lilly’s on-going and future projects. The ribbon-cutting coincides with a multi-year extension of ShangPharm’s contract with Lilly.

“We are delighted to extend and deepen our highly productive relationship with Lilly,”​ said Michael Xin Hui, founder and CEO of ShangPharma.

“Renewing our agreement to serve as a key support partner for Lilly's discovery services is a clear indication that international pharmaceutical companies appreciate the high quality of ShangPharma's team and the excellence of our R&D capability.”

Neither firm gave any hint towards which projects Lilly will carry out in the new lab.

However in November, Hui said the site will accommodate continued fast growth for in-vivo pharmacology, with oncology and metabolic disease work particularly in demand.

Bleak forecast

The news backs Lilly’s recent announcement that it will increase R&D (research and development) spending in 2012 despite a steep projected drop in profits​.

Commenters attribute the decline in large part to the firm’s Zyprexa schizophrenia treatment’s patent expiry – a gem which has earned $4.5 billion-a-year for the company.

When Outsourcing-Pharma contacted the firm to ask how the falling funds would affect outsourcing, those in the know were unavailable for comment.

However on a conference call earlier this week, CFO Derica Rice said that Lilly had been preparing for Zyprexa’s generic competition with a streamlining plan that has seen it cut more than 7,000 jobs since 2004.

“Having substantially reduced our infrastructure, we are positioned to fund the R&D that will drive our future growth”​ Rice said.

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