Summary
Eli Lilly & Co. announced on October 14, 2009, the sale of its Tippecanoe Laboratories manufacturing facility in Lafayette, Indiana, to Evonik Industries AG. This strategic divestiture includes a nine-year supply and services agreement, where Evonik will continue to produce active pharmaceutical ingredients (API) and specialty chemicals for Lilly. Approximately 700 Lilly employees at the facility will be offered employment by Evonik, ensuring operational continuity for the site. The sale is a result of a strategic review initiated in 2008, driven by projected declines in the facility's utilization. Factors contributing to this include upcoming patent expirations for key products manufactured at the site, Lilly's shift towards purchasing late-stage chemical intermediates, and the company's increasing focus on biotechnology medicines. The transaction is expected to close by the end of 2009, subject to customary closing conditions.
Key Highlights
- 1Sale of Tippecanoe Laboratories manufacturing facility to Evonik Industries AG announced.
- 2Nine-year supply and services agreement with Evonik for API and specialty chemical production.
- 3Approximately 700 employees offered employment by Evonik.
- 4Strategic decision driven by projected decline in site utilization, patent expirations, and shift towards biotechnology.
- 5Expected to incur third-quarter 2009 charges of $0.23 per share after-tax, including $355 million in pre-tax non-cash impairment and other charges, and $38 million in severance charges.
- 6Transaction planned to close by the end of 2009, subject to closing conditions.