Eli Lilly plans new 2 billion euro German plant
BERLIN, Nov 16 (Reuters) – U.S. pharmaceuticals company Eli Lilly (LLY.N) plans to build a new plant in western Germany, sources close to the matter told Reuters, with one putting the investment at 2 bln euros
The company declined to comment on the plans but news conferences are planned in Alzey, where sources say the plant will be built, and Berlin on Friday.
The project will be fully funded by the medicines giant, which has seen surging demand for its diabetes drug Mounjaro, now also being used off-label for weight loss, people familiar with the matter had told Reuters on Wednesday.
No details were available on what the plant would produce.
The town of Alzey is within an hour’s drive of the headquarters of drugmaker Boehringer Ingelheim and BioNTech and of chemicals giant BASF.
Other people familiar with the plans told Reuters that at least 1,000 jobs would be created.
“This is about a four-digit number of new employees,” said one, adding that there would be a positive knock-on effect in related businesses such as packaging.
The U.S. company, which has been present in Germany since 1960, already has 1,000 employees in the country.
Eli Lilly said it would unveil “far-reaching investment plans” at Friday’s news conference, which will be attended by Germany’s economy and health ministers.
The move looks to be a win for the German government, keen to show that Europe’s biggest economy remains an attractive manufacturing location despite soaring energy prices caused by the loss of Russian gas following Moscow’s invasion of Ukraine.
Other recent investments in the country, including chip plants by the U.S.’s Intel and Taiwan’s TSMC, were won with the promise of massive public subsidies, making Lilly’s fully-funded investment potentially a more positive story for the government.
Mounjaro’s success helped Lilly post a 37% gain in third-quarter revenues to $9.5 billion, topping Wall Street estimates.
The group’s market value has ballooned to around $580 billion, up more than 65% so far this year.
The drug is likely to be approved for wider used against weight loss in the European Union after the bloc’s drugs regulator recommended market clearance.
However, in Germany, state health insurance is barred from paying for weight-loss drugs. Non-diabetic patients with a prescription for weight-loss will likely have to pay out of their own pockets.
Indianapolis-based Eli Lilly and Danish rival Novo Nordisk (NOVOb.CO) are ahead in a race to grab a slice of an estimated $100 billion global market for anti-obesity treatments from a class of drugs originally developed for diabetes known as GLP-1 agonists.
It has said it expects the U.S. Food and Drug Administration to decide in the first quarter whether to approve its new Alzheimer’s drug donanemab, and submissions to other global regulators are underway.
($1 = 0.9219 euros)
Reporting by Rene Wagner, Klaus Lauer, Andreas Rinke and Ludwig Burger, Writing by Thomas Escritt and Madeline Chambers, Editing by Miranda Murray and Christina Fincher