Eli Lilly looks to cut 500 jobs to streamline manufacturing of insulin products, Forteo drug
The Associated Press
Published: April 16, 2008
INDIANAPOLIS: Drug maker Eli Lilly and Co. plans to cut up to 500 jobs to streamline the manufacturing of some insulin products and the osteoporosis drug Forteo.
The Indianapolis-based company offered a "voluntary exit program" to about 2,000 employees in central Indiana on Wednesday with a goal of trimming its work force by up to 500 people, spokesman Phil Belt said. All the cuts will be made through the voluntary program, he said.
"There's no plan right now to supplement it with a layoff or anything like that," he said.
The voluntary program includes a severance package based on the employees' length of service. Belt declined to offer more details.
The actions come a month after the company ended its development program for inhaled insulin. But Belt said productivity improvements drove the cuts.
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The cuts will affect sites that make ingredients for the insulin products Humalog and Humulin, as well as Forteo. Humalog ranked fourth among Lilly drugs with $1.5 billion (€950 million) in sales last year. Humulin notched $985 million (€622 million), while Forteo took in $709 million (€448 million).
Lilly must align manufacturing with customer demands "over a time period in which some products will lose patent protection while other new products are launched," company CEO John Lechleiter said in a statement.
Humalog is one of several Lilly drugs that will lose patent protection between 2011 and 2014. Others include top seller Zyprexa, an anti-psychotic that had $4.7 billion in sales last year.
Belt said Lilly expects about 430 manufacturing employees to take its offer and about 70 people in research and development. The cuts will be capped at 500. Lilly made its offer Wednesday morning, and employees will have until early next month to decide.
Lilly will record a second-quarter charge for the cuts. The amount will depend on how many employees take the offer.
The drug maker employs 12,600 people in central Indiana. Its worldwide employment stood at 40,300 as of March 31, down nearly 13 percent from 46,100 at the end of 2003.
Lilly shares rose $1 to close at $52.55 in trading Wednesday.
