Indianapolis-based Eli Lilly and Co. plans to open a diabetes research center in China, the drugmaker said Tuesday, citing the high incidence of the disease there.

Set to open in Shanghai in the second half of 2011, the research center will focus on discovering new medicines to treat diabetes. Almost 10 percent of adults in China have diabetes, the company said.

“We are establishing this research center, first and foremost, to meet the growing unmet medical needs of those living in China with diabetes," Lilly Research Laboratories President Jan Lundberg said in a prepared statement.

The company did not disclose the costs associated with the new center, but Lilly said it also has committed about $2.5 million over three years to support collaborative diabetes programs between Chinese and European academic centers.

Lilly said its center initially will employ about 100 scientists and support staff, most from China. Shanghai native Bei Betty Zhang, an internationally recognized diabetes expert who received a Ph.D. from Indiana University, will lead the research efforts.

The center’s goal is to discover breakthrough therapies for diabetes as part of Lilly's global diabetes research and development efforts. Drug development is crucial for Lilly, which is facing patent expirations for several best-selling medicines in the next few years.

It has suffered some recent setbacks. Just this month, U.S. regulators unexpectedly delayed the market launch of Lilly’s latest diabetes drug, Bydureon, until the second half of 2012.

Lilly has been building its organization in China. The company has manufacturing facilities in Suzhou and more than sales 30 offices throughout the country, investing more than $300 million there since the early 1990s.

In 2007, it launched a venture capital fund focused on the biopharmaceutical industry in China. Lilly Asian Ventures has made six investments totaling more than $40 million so far, the company said.