- Eli Lilly & Co. will invest $72 million into building out insulin manufacturing capacity at one of its Indianapolis facilities, a move aimed at better meeting demand for diabetes treatments like Humalog and Humulin.
- Earlier this year, Lilly said it would earmark $850 million for expanding and upgrading its U.S. operations — part of the $1.1 billion in total the pharma company plans to spend on capital expenditures in 2017.
- Humalog, a fast-acting insulin, is Lilly's top-selling drug. Increased competition and pushback over pricing have put pressure on diabetes drugmakers generally, but so far Lilly appears to be weathering the market tightening better than its peers.
While details were minimal, Lilly said the investment would fund replacement of an existing insulin vial filing line and help upgrade manufacturing technology at the site.
Previously, the drugmaker staked $85 million on expanding device assembly operations in the U.S. for its GLP-1 diabetes drug Trulicity (dulaglutide), which has become a key product for Lilly. The investments into diabetes manufacturing seem to fit a general theme of upgrading the company's production capabilities in the space.
Lilly CEO David Ricks also used the announcement as an opportunity to continue advocating for corporate tax reform, expressing support for the package currently being considered by Republicans.
"The current U.S. tax reform proposal, developed by the White House and congressional Republicans, would cut the corporate tax rate to 20 percent, put in place a territorial system, and maintain tax credits for research and development," Ricks said in a statement.
"If enacted, these proposed reforms would go a long way toward leveling the playing field for American workers and businesses competing against their foreign peers," he said.
Ricks was one of four pharma CEOs to sign a letter sent to Congress in February pushing for lower rates. The rationale for pharma companies is clear — beyond a reduced tax expense, lower rates would allow drugmakers to more freely repatriate the billions in cash many hold offshore.
Lilly says favorable tax reforms would be a powerful incentive to continue investing in the U.S.
In the past, however, so-called repatriation holidays didn't lead to investment and job creation as much as it spurred stock buybacks.