Eli Lilly and Co., the biggest U.S. maker of insulin products, will pour another $700 million into manufacturing capacity, more than tripling its investment in the expanding market for diabetes treatments.
The move includes a $45 million investment for Lilly's operations in Indianapolis, on top of a $400 million investment the company announced over the past two years.
Lilly is expanding plants in Puerto Rico, China, France and at its headquarters in Indianapolis. China alone will see a $350 million buildup that will enable Lilly to produce more insulin cartridges for re-usable devices.
“We’re doubling down on insulin, and diabetes,” Enrique Conterno, the head of Lilly’s diabetes business, said. The $700 million brings to $1 billion the amount Lilly is spending on insulin manufacturing this year.
Lilly announced a year ago that it would build a $140 million insulin-cartridge plant in Indianapolis, then decided in April to spend another $180 million to more than double the size of the facility. In addition, Lilly is planning several other projects for its local operations totaling about $80 million, including a $40 million product-inspection center.
The number of diabetics worldwide is projected to grow to 592 million in 2035 from 382 million this year, according to a report released Thursday by the International Diabetes Federation. Those rates are growing rapidly in emerging markets, with 80 percent of diabetics living in low- or middle-income countries, the foundation said.
Lilly is expanding into more cities and regions in China, where international drugmakers dominate the insulin market.
“We have been really investing in that field, and if you look at some of the results we’ve had, we’re gaining market share,” said Jacques Tapiero, Lilly’s president of emerging markets.
Lilly has said that it will have a treatment in every major class of diabetes therapy, from pills to insulin injections. It has had less success developing drugs for other diseases, though, and Conterno said diabetes is competitive.
The setbacks for Lilly’s experimental medicines and the heavy wager on the diabetes market led Jami Rubin, an analyst with Goldman Sachs Group Inc., to downgrade the stock to sell from neutral on Nov. 11. An experimental drug for Alzheimer’s disease also has a low chance of success, Rubin said.
Ramucirumab, a compound in the final round of testing usually required for approval, was given a priority review designation by U.S. regulators for gastric cancer though it failed to meet trial goals in breast tumors.