US drug company Eli Lilly has said it may shut down three of its European facilities, as part of a restructuring exercise designed to reduce the cost of bringing its new products to market.
The facilities – two R&D units in Hamburg, Germany, and Mont-Saint-Guibert in Belgium and a manufacturing site in Basingstoke, UK – collectively employ just over 900 workers.
Lilly said negotiations had already started with worker representatives at the sites in accordance with European regulations, and that if the closures proceed as planned their functions will be transferred to Lilly’s other operations, including its main centre in Indianapolis.
The negotiations are expected to take up to 90 days to complete, but a source close to the company said the closures are almost certain to go ahead.
The move is part of a programme designed to cut the cost of developing new drugs at Lilly from an average of $1.1 billion at the moment to $800 million. "These proposals are based on the increasingly challenging global pharmaceutical environment as well as Lilly's current and future business needs," said the company in a statement.
John Lechleiter, Lilly's president of European operations, said that the proposed site closures, which will likely see the loss of almost all of the 900 jobs, were a difficult but necessary step to ensure the health of the business.
The Basingstoke facility has been operated by Lilly since 1939, and was the first manufacturing plant set up by the company outside the USA. It manufactures the antipsychotic medication Zyprexa (olanzapine), Strattera (atomoxetine) for attention-deficit hyperactivity disorder, erectile dysfunction drug Cialis (tadalafil) and Evista (raloxifene) for osteoporosis.
The Mont-Saint-Guibert facility employs around 350 people and concentrates on chemical development, biopharmaceutics and toxicology/drug metabolism studies, while Hamburg employs 150 people and focuses on basic research, with a particular emphasis on diabetes.
Lilly also said it was spending $50 million to build a new German headquarters and expand distribution operations at a site near Frankfurt.